The woman, whose name is suppressed, recalled seeing her lower right arm "almost completely chopped off", and appearing to be hanging on by a piece of skin, Stuff reported.
WorkSafe Acting Chief Inspector Danielle Henry said the worker's injuries were so serious she would never recover full mobility in her hand.
She said WorkSafe's investigation following the incident found the machinery was unguarded.
"The importance of machine guarding has been a focus area across all industries for many years," Henry said.
"Though a task instruction sheet prepared by the company clearly stated that machinery should only be cleaned when it was turned off, our investigation found it was common practice for staff to clean the machinery while it was moving.
"Fresh Meats NZ Limited had gone so far as to identify a hazard, but then did not make sure the safe system of work was in place.
"Writing down a health and safety plan is one thing, but it must be implemented."
A fine of $253,125 was imposed with reparation of $40,000 (including $10,000 consequential loss) ordered.