By Peter Crichton
CONFUSED Malton suppliers are reported to have received their third bombshell letter from the latest pig slaughterers in the UK.
The Malton Bacon factory, which accounts for over 35% of the UK kill, have told producers that as from 19 October the 70p fixed price will be scrapped.
Malton claims that they are supporting their producers to the tune of £500,000 per week and now wish to switch from the fixed price to one more closely related to the AESA.
This change in direction appears to be a buying policy U-turn because it was only in May that Malton announced they were abandoning their AESA-based contract price as it no longer reflected pig values at the time.
It remains to be seen how the new contract price will be tailored to fit in with the AESA. As this is the third major shift in their contract buying price base in twenty weeks many producers are accepting that contracts as such no longer exist. They claim that arrangements with abattoirs can best be described as informal supply agreements which can be terminated a will.
With several large scale producers still serving out their contract notice period which terminates in early December trade sources are forecasting that Malton may well be short of throughput by the end of the year.
This latest decision must mean, however, that Max Hillard, managing director of Malton, expects the AESA to be below 70p in December.
In the light of subsequent events his last two price shifts turned out to be more expensive for the Unigate parent company than if he had stuck to the old AESA based price. Many producers also feel that he has lost the confidence of the industry by these changes and this latest announcement will do nothing to restore this.
Some marketing groups have commented that Max Hillard could pay the penalty and find himself on the transfer market if it turns out that this latest move is his third own goal of the season.