13 May 2011

5 minute read

Europe

VIA grading was introduced into seven NI factories on 28 March 2011 having replaced the LMC classifiers who had previously provided a manual service to the industry for twenty years. As was generally expected, there appears to have been a change in the distribution of grades following the switchover from manual to mechanical grading.

Tables 1 and 2 below allow readers to compare classification results for the five weeks before (March 2011) and after (April 2011) the introduction of VIA. A comparison with April 2010 is also provided. Grading results from 2000 to 2010 are provided in Tables 3 and 4 to put these figures into some form of historical context. Table 1 below shows that in the first five weeks of VIA classification (April 2011), U grades accounted for 12 per cent of the prime cattle kill. This compares with 20 per cent in the five week period immediately preceding the introduction of VIA (March 2011). In April 2010, 22 per cent of prime cattle were U grades. Meanwhile, 12 per cent of prime cattle were P grades in the five weeks following the introduction of mechanical grading. This compared with six per cent in the previous five week period and 3 per cent in April last year. On fat class (Table 2), the proportion of animals killing at fat class three was 48 per cent in the five weeks following the introduction of VIA. This compares with 57.5 per cent in the previous five week period. Since the introduction of VIA there has been an increased proportion of prime cattle grading at fat classes 1,2,4 & 5.

Readers should be aware that comparing grades before and after 28 March 2011 is not a straightforward analysis of VIA grading against manual grading. Since VIA has been introduced, a proportion of the price reported kill continues to be graded manually. Therefore the figures for April 2011 in Tables 1 and 2 represent a mix of mechanical and manual grading.

Tables 3 and 4 show that grading results have changed over the years presumably due to developments in the slaughter mix. On the same theme, it is also important to note that although VIA is assumed to be the major factor in the changes this April, other factors such as an increased proportion of dairy-origin beef in the slaughter mix may also have caused a movement towards weaker conformation in the overall kill in the last year. This probably explains some of the differences in the statistics between April 2010 and March 2011 (manual grading was used during both periods). Factors such as weight, age at slaughter and the rising cost of feed may also have influenced these figures, before any impact of VIA is accounted for. In this respect the comparison of the five weeks before and after VIA is probably more useful. However, caution must be exercised given the impact of seasonality from the start to the end of this ten week period.

It is also crucial to point out that we are not comparing like-with-like, given the fact that manual graders operated to a five point scale while the machines operate to a 15-point scale. While the machine has the option of applying +,= and - sub-classes, the manual grader did not have the same flexibility.

Notwithstanding any of the drawbacks in making these comparisons, it is clear from the figures that grading is somewhat tighter under VIA. This was something that was generally expected within the industry. With more grades possible, a wider distribution is inevitable under a 15-point scale and by its very nature, a machine is more objective in how it applies grades. These differences should not be seen to detract from the service provided to the industry by LMC’s manual graders with the benchmark for their license and performance set by the EC and monitored by DARD (the competent authority on grading).

The expected changes in the application of the grading standard and the introduction of the 15-point scale was what prompted the industry to develop a new pricing grid. This pricing grid was designed to compensate for an expected tightening of classification under VIA and to provide a greater reward for suckler-origin cattle. The crucial point is that the pricing grid was designed to be price neutral, so that the entire NI beef producing community should be no better or worse off as a result of the introduction of VIA. In practice it is impossible to ascertain whether this was achieved given that the market was moving in the week VIA was introduced. For such an observation to be made, all aspects of the market would need remain unchanged during the week of its introduction so that the real price impact of the change in grading and payment grid would be obvious.

The impact on individual producers may be mixed and there is the potential that while some farmers might not be happy with the grades awarded, the changes in the market price as a result of the introduction of the new pricing grid ought to compensate for that to a greater or lesser degree. An important point to remember for those unhappy with the grades they have been awarded, is that the incremental impact of stepping down the grading scale (e.g. from U to R) is now lessened by virtue of the fact that the steps are no longer as steep from one grade to another under the 15-point scale as it was under the 5-point scale.

On a final note, on Monday DARD published the Monthly Automatic Classification Accuracy Data for Northern Ireland on their website. This report shows that the machine is performing within the legislative tolerances set by the EU.

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