31 May 2002

Efficiency hampered by poor price transparency

FOG surrounding prime cattle pricing – perpetuated by leading abattoirs guarding pricing structures like the crown jewels – can no longer be tolerated.

Speaking at a Beef 2002 seminar, National Beef Association chief executive Robert Forster said that an industry selling 2m cattle a year must have price transparency.

Transparency was necessary to provide an efficient framework to cater for the huge variation in type, breed, finish and weight of prime cattle and to ensure they are directed to the most appropriate buyer.

"The fog is becoming even more impenetrable, with so many auction marts taken out of the marketplace following the foot-and-mouth crisis. There are only 3500 head of cattle being sold each week through marts compared with 20,000 pre-F&M."

Price data available to beef producers is out of date and provided by a tiny sample of abattoirs, added Mr Forster. It was inhibiting beef finishers who were subsequently unable react to the market and it was costing them dear.

Carcass specifications were also confusing. Producers had no idea what dressing specification was applied to their cattle, despite the importance of this information in making marketing decisions.

"About 40% of abattoirs are trimming carcasses to the mild MLC standard specification, but others are using the more severe EU carcass dressing specification demanded by many supermarkets.

"Other abattoirs dress carcasses to their own, private specification.

"But a severe dressing specification applied to a high value carcass can mean that the producers will be paid less than another selling a low value carcass trimmed less severely," said Mr Forster. &#42