Unravelling abattoir prices
Unravelling abattoir prices
Sell your cattle deadweight?
Then being able to
compare abattoir prices
may bring better returns
as James Garner discovers
from one large-scale
beef-finishing unit
CARCASS grid headline prices can be misleading, according to one Norfolk beef finisher who has the figures to prove it.
Philip Dale, beef manager for Paul Rackham Ltds 505ha (1250-acre) arable and beef business near Thetford, is a deadweight selling convert, but adds that the key to getting the best prices is thorough homework.
"The important thing is we know what abattoir grid prices actually mean and can compare one price with another – something its simply impossible to do without our records."
Having a public weighbridge allows Mr Dales team to weigh all the stock on and off the farm telling him exactly how cattle have performed in the yards, and allowing him to track killing-out percentages and realisation of each animal in p/kg.
"We know it costs us 49p to put on each kg and that we have a reasonable business if we can buy stock on the hoof at 50% of the price/kg we sell them for on the hook."
The majority of the units 5000 finished animals are sent to three abattoirs in the Midlands and East Anglia. This year, Mr Dale has sold 60% of his stock to one outlet and averages 85p/kg ex-farm across the board, after haulage and marketing costs. But there are marked differences between the few abattoirs the firm now deals with, he says.
"Within all the R4Ls we sent in the first quarter of this year, we have seen headline prices of 177p/kg from one customer giving us little more at the farm-gate than the 172p offered by another.
"We have also found R4Hs at one abattoir delivering the same value at a quoted 169p/kg as the 177p/kg we got for R4Ls at another.
"And weve recorded a difference of 4p/kg liveweight between R4Ls sold to different abattoirs at the same quoted price of 172p," he says (see table).
He puts the differences down to deductions, which vary according to the outlet. Some, he says, make flat rate deductions of over £18/beast, compared with just £11 at others – a difference of about 2p/kg on the carcass.
There are major variations too in both the in-spec weight ranges and penalties for over-weights. And haulage costs can vary from nothing to £20/beast (5.5p/kg) depending on outlet and distance.
"Our best returns come from a small local abattoir. But it only takes a certain number of stock and prefers smaller heifers for its butchers and caterers, while our larger outlets pay relatively well for heavier beasts and will happily take them all.
"With the numbers and range of stock we have, we prefer to deal with several customers. That way we can send to each the cattle that will get the best returns for us." *
Customer Grade Weight Deadweight K/O Grid price Realisation
(ex-farm) (ex-farm weight)
A R4L 557kg 311kg 56% £1.72/kg £0.93/kg
R4H 565kg 321kg 57% £1.73/kg £0.96/kg
O+4L 549kg 285kg 52% £1.72/kg £0.87/kg
B R4L 667kg 353kg 53% £1.77/kg £0.90/kg
R4H 658kg 353kg 54% £1.75/kg £0.91/kg
O+4L 666kg 347kg 52% £1.71/kg £0.85/kg
C R4L 658kg 353kg 54% £1.72/kg £0.89/kg
R4H 663kg 368kg 56% £1.69/kg £0.90/kg
O+4L 660kg 338kg 51% £1.67/kg £0.82/kg
Source: Paul Rackham Ltd.
A simple message… Know what grid prices mean, says Philip Dale.