Meat company AFFCO says it is losing business to competitors due to the ongoing industrial dispute at its eight North Island processing plants.
The company and the Meat Workers Union have been locked in a dispute over a new collective agreement for the past 10 weeks.
AFFCO operations manager Rowan Ogg says about 450 workers are locked out and 900 are on strike.
He says the plants will remain open while collective bargaining continues, but the beginning of the dairy cow cull is putting pressure on processing.
"We're not handling everything that is available to us at the moment because of the restrictions on us because of the strike, but we're still operating all of our sites at reasonable levels."
Mr Ogg says if the AFFCO plants are under real pressure, some processing will probably go to competitors.
"Some stock is also being held because the growing season has been kind and farmers still do have plenty of feed and are utilising it."
Mr Ogg says typically, farmers do want to be able to send their stock to AFFCO, but there are also others that want to make a stand against the company.
AFFCO and the union are continuing negotiations by way of facilitation, a government-assisted form of mediation that is non-binding.
The union is challenging the legality of the lockout and the case will be heard in the Employment Court in Auckland starting on Wednesday.