LMC Report: GB Retailers’ Beef Specification

NORTHERN IRELAND, UK - In the last week of October two Northern Ireland (NI) meat plants, who supply one major GB retailer, introduced a new pricing grid intended to reinforce their specification for prime cattle.
calendar icon 29 December 2009
clock icon 3 minute read

Following this development, most of the other plants gradually fell in behind it with a similar pricing grid based on a broadly similar specification. This specification and the associated bonuses and deductions are summarised in Tables 1 and 2 below. At the time they were introduced, we stated in the Bulletin that the changes to the payment system were driven by plants attempting to reduce the number of OTM cattle and increase the number of cattle fitting their preferred weight specification. We stated that this may in turn have been driven by two factors:

  • A desire by the plants to increase efficiencies through a more homogenous slaughter mix
  • Pressure to comply with retailer specifications In the subsequent debate on the issue we pledged to request and publish the beef specifications for individual GB retailers.

Enquiries on specifications were sent by LMC to multiple retailers/food service processors on 24 November 2009, with a pro-forma to assist their replies suggesting the points to be covered. Reminders to those who had not responded were sent on 14 December 2009. The request was for LMC to be informed of their company’s requirements so that LMC could communicate accurate messages to the industry, as it is required to do under its founding legislation (LMC is required to “disseminate information about the requirements of markets for livestock and advise on the characteristics which livestock should possess in order to be readily marketable”). It is extremely important in the current situation, with changes in price intended to reinforce supplies to specification, that producers are made aware of the specifications their markets require.

However, producers should be aware that our enquiries were made only with the major GB customers of our industry, and that significant volume can be marketed elsewhere, but NI processors supplying those major GB customers will want to attract sufficient in-spec supplies to meet their customers’ demands.

You will note that over-age cattle and carcases weighing over 400kgs cattle do not fit the specification of most retailers. However, you will also note some differences between these retailer specifications and the specification outlined in Tables 1 and 2. The table shows that there is a market for some OTM and heavier cattle, although this market is clearly limited. For example, ASDA’s heavy cattle order is for limited numbers from loyal suppliers. 

There are differences between the beef specifications of the different GB retailers in terms of weight, grade and age. This contrasts with the more generic specification applied by the processors. This information will no doubt encourage producers to seek the best paying customers for the type of cattle they have and to negotiate the price with individual plants. It is important to note that one retailer has not disclosed its specification to us, but has to its farmer suppliers.

 

Table 1: Specification for 8p/kg bonus over base price

Table 2: Deduction Specifications

Further Reading

- You can view the full report by clicking here.

TheCattleSite News Desk

© 2000 - 2024 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.