Beef prices analysis adds to spec changes row

There is huge variation in the amounts farmers are being paid per kilogramme of meat due to changes in cattle grading grids.

New specifications brought in by processors in the past year mean some producers are being paid up to 306p/kg less than the average price for their steers.

The findings come from AHDB Beef & Lamb’s latest analysis of beef-grading specifications as part of its drive to improve processor transparency.

The analysis found the difference in prices was greater the further away carcasses fell in the grid, reflecting meat yield less.

See also: Beef producers losing thousands from grading spec changes

“It is clear from the analysis presented that prime cattle prices don’t reflect the yield of trimmed primal cuts from carcases,” said the report by the levy board.

“In particular, carcases which are well away from the target specification attract much lower prices than might be expected.

“Furthermore, the differences have increased significantly over the year to February 2016,” it said.

February 2016: Deviation from average price per kg of trimmed primal cuts for steers. Prices are in p/kg

 

1

2

3

4L

4H

5L

5H

E

-101

-27

-9

+18

-7

 

 

U+

-78

-24

-3

+12

+16

-31

+9

-U

-105

-22

-1

+14

+23

-2

-15

R

-114

-30

-1

+19

+29

+2

+39

O+

-167

-50

-13

+13

+19

-20

+9

-O

-221

-77

-39

-18

-23

-84

-120

P+

-290

-124

-77

-61

-76

 

 

-P

-306

-147

-116

-95

 

 

 

February 2015: Deviation from average price per kg of trimmed primal cuts for steers. Prices are in p/kg

 

1

2

3

4L

4H

5L

5H

E

-59

-26

-3

+5

+11

 

 

U+

-49

-23

-3

+11

+12

+23

 

-U

-65

-25

-3

+13

+22

-5

 

R

-108

-26

-4

+17

+32

+23

+36

O+

-129

-41

-11

+15

+28

+19

-26

-O

-173

-61

-37

-14

-11

-46

-49

P+

-229

-86

-63

-37

-53

-90

 

-P

-195

-143

-105

+12

 

 

 

The revelations will do little to alleviate the anger felt by many producers and representatives who say the changes are not just about driving higher consistency of carcass, but have allowed processors to get the same meat cheaper.

John Royle, chief livestock adviser at the NFU, said the levy board’s findings underlined the fact that lower-graded cattle were being disproportionately penalised for not meeting the core specifications.

“The grid is not cost neutral,” said Mr Royle. “More than £1m has been removed from producers due to reductions.”

See also: Advice for finishing beef cattle at lower carcass weights

However, he added that with prices having regained some ground in recent weeks off the back of tighter supplies and a weak pound, processors were being more flexible and producers had been able to bargain a little.

But it would only take an increase in supplies and drop in prices for producers to feel more concerned again about the prices they received on the grids, warned Mr Royle. 

Hertfordshire farmer and former processor Stuart Roberts said the grading grids were outdated: “We have grading technologies available that can measure real meat yield down to specific retail cuts and we have tools that can measure tenderness and marbling.

“However, we don’t use any of these tools in calculating what we as farmers are paid. We must start to do this.” A spokesman from the Association of British Meat Processors said: “While there is clearly a relationship between total carcass value and meat yield, it is not surprising this is not a direct correlation because meat yield is not the sole determent of the value of a carcass. “As the report highlights, other factors are also important in determining the value, such as the size of certain cuts.”

Stephen Howarth, market specialist manager at AHDB and joint author of the report, said: “While some may conclude from this research that the prices paid for prime cattle are unfair, it’s important to bear in mind that processors need to ensure a supply of cattle that fit the requirements of their customers.”

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