5 April 2002

Co-operative marketing adds value to red meat

Politicians have left Welsh livestock farmers in no doubt

their futures depend on co-operative marketing and

adding value. Robert Davies finds out how this is taking

shape in the form of the Welsh Meat Company

ADDING value to red meat products can help squeeze more profit from the food chain. After a false start first time around, members of the new Welsh Meat Company hope such a step – plus the co-ops move to processing – will bring them better returns.

WMC general manager Jane James says the co-op is certainly following government directives. "Every policy statement from the National Assembly for Wales emphasises commitment to helping farmers market their products better, including getting more involved beyond the farm-gate. I think co-operation is the only show in town."

The idea of a complete Welsh co-operative meat company involved in downstream processing was first aired in a Welsh Office-commissioned red meat strategy document published in 1999.

A feasibility study warned of considerable risks and narrow margins and early efforts to create the co-op failed to attract the target number of farmer members specified in the prospectus, or get Welsh Development Agency funding.

However, the relaunch saw around 500 producers investing £250 each, while another 100 have joined since the WMC started trading last summer.

Lambs and beef cattle are being procured for three abattoirs and the company is involved in a joint venture to re-open Caerfagu Abattoir, near Llandrindod Wells in Powys, by early summer.

A lamb-based sausage, the first of a planned range of value-added products, is a joint venture with Oriel Jones and Son, Llanybydder.

Six other products are at an advanced development stage at the Food Centre Wales in Cardiganshire. Meat and Welsh sausages identified by the co-ops Celtic Pride logo will soon be on sale through most major retailers.

"We exist to help our members get the best possible return for their livestock and to give them a stake in, and a share of, the profits from value-added processing. The best way of doing this is to connect farmers with others in the food chain."

Mrs James claims that by forming mutually beneficial relationships with abattoirs and retailers, and by keeping the co-ops administrative costs in check, more money will reach farmers pockets.

"Information about the products we have under test is commercially sensitive, but they include fast food products, crumbed products and a luxury meal idea. They are made using forequarter meat that so often reduces overall carcass value."

She envisages that processing for retail and catering outlets will be just one facet of growth. Direct supply of finished animals to abattoirs and the operation of liveweight collection centres will play its part too.

"The foot-and-mouth crisis has focussed attention on the way we market livestock. As things settle down we hope to be able to provide a range of options for members and non-members. Those who invest know they will also share in earnings from processing."

John Davies, who manages Food Centre Wales at Horeb, where the companys products are being developed and tested, expects other groups of farmers to get involved in adding value.

"Up to 60% of the cost of developing new products can come from EU Objective 1 funding, and we have some money to help those outside the qualifying areas. But those wanting help will have to put forward very convincing arguments," claims Mr Davies.

If farmers put forward innovative ideas, then they could get substantial subsidised technical help, and advice on testing and scaling-up production. Where required the centre could also link farmers with commercial processors and marketing specialists.

"Farmers cannot become butchers and catering experts overnight. Food industry regulations are complex and livestock farmers need to be able to draw on affordable expertise of the highest calibre."

Mr Davies says his centres £500,000 annual budget demonstrates that politicians want to encourage high quality, branded Welsh foods.

Don Thomas, the director of the body that oversees Welsh agricultural co-operation and general manager of Welsh Lamb and Beef Promotions, says farmers have to accept marketplace change.

"We need more joined-up thinking on marketing to ensure the right product is delivered to consumers." &#42