Butcher sawing beef © Food and Drink/REX/Shutterstock© Food and Drink/REX/Shutterstock

Britain’s three biggest abattoirs have denied that changes to how cattle are graded have wiped millions off farmers’ incomes.

In front of MPs on the Environment, Food and Rural Affairs (Efra) Committee on Wednesday (14 September), bosses from 2Sisters, ABP and Dunbia challenged the findings of an AHDB study.

One part of the levy board research, conducted over the summer, concluded that changes to the value of parts of the grid knocked 7%, or £1.1m, from the monthly cattle kill.

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ABP UK chief executive Tom Kirwan, whose firm has introduced a new 15-point grid, while rolling out visual image analysis (VIA) grading in its UK plants, said the report was “very emotive”.

He said average cattle values at his abattoirs rose from £1,095 in the week before the system was brought in to £1,100 the week after.

Unlike human graders, he added, the VIA system was “more objective than subjective”.

“I do not recognise the million pounds a month as missing,” Mr Kirwan said. “This erosion of value I question.”

Dunbia group managing director Jim Dobson told MPs the report should be repeated over a longer period than AHDB’s one-month comparisons.

Fifth-quarter drop

It should also reflect how the value of the so-called fifth quarter, including cattle hides, has dropped.

“It would be a good idea to do it again and check it again on different cattle,” Mr Dobson said.

The committee appearance was the first time processors have had a full say in a debate over beef grading that has rumbled since the spring.

Farmers have complained that new payment grids, launched over the winter, were much tougher on cattle just outside of supermarket spec, and penalties on heavier cattle, more than 380kg, had been hiked up at short notice.

Fairness in the sector

The questioning spun off into wider questions about fairness in the beef sector.

2Sisters red meat livestock procurement director John Dracup told the MPs that the industry’s voluntary code, drawn up after the 2014 market crash, should be made mandatory.

Just under one in 10 abattoirs have signed up to the code, which demands a 12-week notice period for changes to terms and conditions.

“Being the architect of the code, I am very proud we have got to a point where it has rolled out and been made available to the industry,” Mr Dracup said.

“I was slightly disappointed that there was not wider uptake. I would welcome it becoming mandatory because it is all about transparency.”

Mr Dobson from Dunbia, which has not signed up, said he would not commit to guidelines that were incomplete.

He said the whole industry, including supermarkets and renderers, should have been covered, along the lines of the supermarket grocery code.

“The code of practice should be for the whole chain, not just for [abattoirs],” Mr Dobson said.

Consumer trends changing

On longer-term communication, ABP’s Mr Kirwan said the changes in consumer trends had been coming for three or four years.

Retailers were now selling steaks at a fixed weight, he said, which required more consistency.

Dunbia’s Mr Dobson said most of his cattle came from finishers who kept beasts for six months at the most and were “aware of what the customer needs”.

Mr Dracup from 2Sisters said he had spent years working with farmers to get them to supply what the marketplace wanted and the grid did an adequate job of explaining what was needed.

“Unfortunately, farmers respond far more clearly to penalties than they do premiums,” he said.  

Efra committee chairman Neil Parish asked each of the processors if they had ever colluded in the deadweight trade, given the close grouping of each week’s base prices.

All three witnesses denied the charge, claiming the market was working well, with strong demand for British beef and limited supply, which led to UK farmers receiving some of the highest prices in the world.

Supermarket view

After the long session on abattoirs, Tesco and the British Retail Consortium gave the supermarket view.

Tesco group quality director Tim Smith said customers drove specification above everything else and those requirements had been “made clearer”, rather than tightened.

Britain’s largest supermarket was also planning to build a dedicated beef supply group, with farmers on contracts, along the lines of its potato and dairy schemes, he added.