Beef farmers angered over harsher penalties
Furious beef farmers have claimed harsher penalties for out-of-spec cattle brought in by processors overnight are damaging the industry.
Tougher penalties have been reported for bulls over 16 months, non-farm assured cattle, those over 30 months and those that were underweight.
Irish-based processor ABP has been singled out for bringing in a new payment grid in February that raises the deduction levels for out-of-spec stock.
Carcasses below 240kg could face deductions of 60p/kg, those below 220-230kg can suffer a 70p/kg penalty, and P-grade cattle face deductions of 150p/kg.
See also Beef market finely balanced as prices fall
National Beef Association chief executive Chris Mallon said the sudden changes affected farmers’ ability to make a profit, particularly those finishing dairy stock.
He said one farmer with more than 1,000 black-and-white cattle could be facing deductions of £150 a head which would have a huge financial impact.
“There is no trust now at all. It feels to beef producers that [the processors] are taking advantage of a temporary match in demand, not even an oversupply,” he said.
“If you invest in cattle it is not something you do in a matter of weeks. This type of cut, when it comes in overnight, really hits farmers badly.”
“The penalties that are in place are too high. I would like to think in the future there is discussion and consultation around grades so farmers can change their systems in time.”
The market is finely balanced, with low consumer demand for beef, EBLEX forecasting supplies to stay tight and falling prices only recovering in the last few weeks.
NFU chief livestock adviser Peter Garbutt said the specifications had not changed that much but the penalties for being outside were greater and more strictly enforced.
“Run it back 12 months we would have been talking about firm prices, surging in the wake of horsegate and processors desperate about boosting supplies to the UK,” he said.
“For them to turn round in that short time-frame, farmers feel pretty annoyed. For a lot of guys the profitability in beef production is on a knife-edge. If we want a long-term sustainable industry we need pricing to be sustainable for the long term.”
In response to the criticism, ABP said deductions had been increased to deal with out-of-spec cattle, such as lighter weight carcasses or older bulls, that were less valuable to them.
“To say that ABP is undervaluing beef cattle is an unfair criticism and fails to recognise the significant investment we have made in the British beef industry over many years, including a £100m investment in the last five years that has enabled use to increase our commitment to buying British cattle by 20% over the same period,” a spokesman said.