The Livestock and Meat Commission (LMC) in its latest market bulletin that there will be no major changes to in-spec incentives offered by meat plants in Northern Ireland.
The LMC highlights that has been an intense debate in recent weeks about red meat factories’ proposed introduction of steeper penalties on out of spec cattle. In February, factories had announced plans to apply tougher penalties on prime cattle that had not completed required standstill periods on the finishing farm and that had resided on more than four farms prior to slaughter. Indeed, a significant overhaul of all incentives for in-spec cattle was proposed.
These plans have been the cause of contention over the last six weeks, particularly those proposals that relate to standstill and the number of farm residencies. There has been vocal opposition to these proposals from both livestock marts and from some farmer representatives.
However, according to the LMC which contacted individual plants recently for an update on these proposals and at this stage, it seems certain that there will be no significant change to any processor’s current incentive schemes on Tuesday 1st April.
In-spec bonuses which range between 8-14p/kg will continue to be paid. There appears to be no immediate prospect of £150 penalties on cattle that have exceeded the number of residencies or not completed the required standstill.
However, LMC understands that most factories remain intent on reducing the volume of out-of-spec cattle by implementing changes to incentives or penalties. Questions remain about the timing of any such changes, and how such penalties/incentives are to be applied at each plant.
Current Situation
The LMC noted in the update that at the moment, there is an 8-14p/kg bonus on in-spec cattle in most plants. Some plants award a 10p/kg bonus for cattle that meet the requirements on age, weight, grade and FQAS. A further 4p/kg is then awarded for cattle that meet the requirements on the number of farm residencies.
It said: “We understand that for at least one plant receipt of the entire 14p/kg bonus is currently dependent on meeting all aspects of the specification, including age, weight, grade, FQAS, number of farm residencies and standstill periods. Reports indicate that this has been the case since at least the start of the year.“
Changes planned in some plants from end of April
LMC understands that one other processor appears likely to adopt this approach from the end of April by making the entire in-spec bonus contingent on meeting ALL aspects of the specification, including the residency criteria.
It also commented that some of the processors concerned have said that they are not ruling out further changes to their pricing policies should they deem it necessary to reduce the number of out-of-spec cattle.
Meanwhile, the LMC concluded it remains to be seen what approach other factories will take. It said: “Yesterday, several plants told us they had not decided on the nature or the timing of any changes to pricing policies although in several cases it seems that a change is likely at some stage. There are indications that some plants have not been actively discounting these cattle to date. What they do in the future remains to be seen.”
