Blade Farming has acquired the calf marketing business of Mole Valley Farmers in the West Country for an undisclosed sum.
The deal brings producers in the Mole Livestock Initiative over to Blade’s contract rearing system, which pays a fee to farmers rearing their baby calves.
The reared calves will be sold to Blade finishers, and on to supply Tesco, McDonald’s or Somerfield, under its “So Good West Country Beef” brand.
MLI was set up to market members’ calves for finishing and feed information back down the supply chain from customers in the processing and retail sectors, according to business development manager Richard Jones.
It now has about 500 members.
The acquisition doubles the number of Blade calf rearers, said Richard Phelps, managing director of Blade Farming South West.
“We are looking at all calf rearing markets and standardising production to take cost out and ensure finishers always end up with consistent calves.”
MLI members would see smaller commissions and lower fixed costs as a result of the deal, claimed Mr Phelps.
“Their model couldn’t be efficient by itself.”
Mole farmers will also have more marketing options, because Blade offers forward contracts for finished animals.
Mr Phelps quoted deadweight beef prices of 200p/kg for animals killed in 2006 and 215p/kg for those finished this year.
“We’ve had to take a view on cattle prices, and we’re more cautious next year because cows are coming back in.”
Blade is looking to expand its network of producers northwards to cover new areas of the UK over the next year.