Beef processor Dunbia has come under attack from farmers for giving its producers just two weeks’ notice of significant changes to its terms and conditions for cattle specification, which could leave them hundreds of pounds out of pocket.
Dunbia, which processes more than 300,000 head a year, has given notice of the specification changes, which will come into force on 16 November and includes a dramatic decrease in carcass weight and the introduction of a “four residencies” rule.
John Royle, NFU chief livestock adviser, said farmers producing heavier animals under Dunbia’s new proposals could lose up to £70/animal based on a price of £3.43/kg for an R3 animal.
Animals in the range of 400-415kg would have 10p/kg deducted, while heavier animals of between 415-440kg would lose 20p/kg.
The announcement by Dunbia emphasised the need for them to sign up to the processor code of practice, said Meurig Raymond, NFU president.
“Dunbia, who are not signatories, have shown exactly why the code, which sets out a minimum notice period for changes in terms and conditions for cattle, is absolutely necessary.
“They publicly claimed that a voluntary code was not in their best interest as their relationship with suppliers was fair and transparent.
“Yet, they are giving their producers virtually no notice for significant changes in the specifications of cattle – there is simply no opportunity for cattle already in the production system to adjust to the new spec.
“Beef production is a long-term enterprise and has a two- to three-year cycle and purchasing and feeding decisions are made well in advance.”
Mr Royle also called for greater clarification that its “four residencies” rule was in line with other processors – allowing movements within business and based on legal ownership rather than statutory moves.
Andy Foot, chairman of the NFU beef group and Dorset farmer, said: “We produce what the market wants but we have to be given sufficient time to be able to produce what the market wants. Beef is not a short-term production cycle and that is exactly why we have negotiated with the rest of industry to sign up to the code.
“Dunbia said they did not need to sign the code because they understand the industry, but that is waffle.
“Why are they changing the specifications at such short notice? Are they being put under pressure by one of the retailers? They need to tell us,” he added.
Dunbia refused to comment.
The processor code was launched eight months ago and is supported by the agriculture minister, George Eustice.