Meat plants to offer 'in-spec' cattle bonuses

Editorial Department • Published 5 Nov 2009 09:00 0 Comments

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New arrangements for selling beef to the meat plants in Northern Ireland started this week. It means that producers selling cattle of the "right specification" will be rewarded with a bonus of up to 6p per kg.

As a consequence, the plants raised their quotes by up to 6p per kg this week to 266p per kg, paying what they say is a 6p per kg bonus on top of the base price of 260p per kg.

While specifications differ between plants, they are typically based on weight, grade, age under 30 months, FQAS, country of origin and the number of farm residencies.

Plants may be insisting on now more than three different farm residiencies for farmers to get into the top price band.

According to the Livestock and Meat Commission, the factories want to communicate the fact that they want to offer an incentive to farmers meeting the requirements of the specification.

The factories say that farmers presenting cattle for slaughter that do not meet the specification can expect more severe deductions than have been typical so far this year.

The LMC say the move has been driven by a number of factors including the desire by plants to acquire more in-spec cattle especially at a time when reduced supply is anticipated heading through November.

While most farmers will welcome the bonus, some will see this as an increase in penalties for out-of-spec beef . The market value of out-of-spec bedf is lower than in-spec beef and it may be the fact that the market is going to pay for what it wants.

Factories also have extra costs with out-of-spec cattle and have more limited markets for the produce. For example, in the present year, the proportion of Over Thirty Months steers and heifers in the slaughter mix has been increasing and is substantially higher than in GB. This represents higher costs for Northern Ireland processors relative to GB based plants.

Retailers may also be taking a more rigorous stance in the application of their own specifications with meat suppliers in recent weeks. The requirement for direct purchase from farms appears to have been reinforced.

Some farmers who purchased cattle in the Republic of Ireland or let their steers run over 30 months may be aggrieved that they were not notified of these changes in time. As a result they may be penalised when going to the meat plants.

However the LMC say in the long term, most farmers will benefit from these developments with the overall result being a higher market value for Northern Ireland cattle.

The LMC wants the plants to publish their specifications in advance to producers to avoid any confusion and to confirm their long term commitment to this new pricing structure as it takes time for producers to adjust.

The LMC will be giving advice to producers on the specifications needed. They say that the new Bovine Information System(BOVIS) being developed by AFBI in collaboration with the LMC will establish relationships betseen the many factors that impact the final slaughter specification such as fat class, conformation, weight, age, gender, growth rate and breed and these will be made available to producers.

Meanwhile, the Ulster Farmers' Union says the decision by some meat processors to increase the prices paid for "In Spec" cattle was one small step in the right direction in creating a fairer cattle pricing structure.

UFU Beef and Lamb Policy Chairman William Taylor said; "We have always pressed for a cattle pricing structure which fairly reflects the meat value of the carcass. The better prices now being paid for 'in spec' cattle is welcomed but we need clearer market signals and better communication in the supply chain to help producers meet the requirements. This new initiative has emerged out of the blue which gives farmers no time to plan for market requirements".

"We have also consistently pressed for the unjustifiable price differential with GB to be removed. The small price rise now being implemented is a welcomed development in addressing the price differential issue".

The UFU has requested a meeting with meat processors representatives to discuss these issues. William Taylor said; "We have always highlighted to the NI processors that farmers producing high quality 'in spec' animals need to better rewarded."

This article appeared in Impartial Reporter 05 Nov 09

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