The Environment, Food and Rural Affairs (EFRA) committee has questioned senior managers from the leading three abattoirs in the UK about the changes to cattle grids. Representatives from Dunbia, ABP and 2 Sisters faced questioning by MPs about the 7% reduction in payments to farmers that these changes have brought about. The Agriculture and Horticulture Development Board (AHDB) has suggested that £1.1 million has been wiped off cattle prices each month since the changes but ABP UK’s chief executive, Tom Kirwan, strenuously denied that this figure was accurate.
Speaking to the group of MPs, Mr Kirwan gave examples of the average cost of animals passing through his company premises, the week prior to the change (£1095), the week during the change (£1097) and the week after the changes were implemented (£1100). He said that he did not recognise or agree with the allegation that value was missing after the changes to the cattle grid were made.
Penalties in favour of incentives
There have been penalties introduced for cattle weighing more than 380kg when they arrive at abattoirs which has garnered complaints from the farming industry as a whole. A representative from 2 Sisters, John Dracup, stated that farmers were more responsive to penalties than they were to premiums or incentives, and this penalty system was the best way to source a product that their customers want.
Tim Smith, group quality director for Tesco, who also appeared before the committee, said that Tesco customer demand was driving their own beef specifications and that the supermarket chain was getting what it required from the processors before any changes were implemented.
Voluntary code of practice for abattoirs
There is currently a voluntary code of practice for the industry, drawn up after the 2014 market crash. Mr Dracup from 2 Sisters was responsible for the instigation of the voluntary code which demands a 12 week notice period for any changes to terms and conditions. Unfortunately, fewer than 1 in 10 abattoirs have signed up to the code. The committee chairman of EFRA, Neil Parish MP, asked each of the three companies appearing before the committee whether they have ever colluded in the deadweight trade. The representatives from Dunbia, 2 Sisters and ABP all denied this charge.
Consumer trends driving the grid change
Mr Kirwan from ABP told the committee that consumer trends had been changing over the last few years, resulting in retailers now selling fixed-weight steaks which require more consistency in supply into abattoirs and the processing chain. The concern was that the changes to the grid pricing and grading system will have impacted farmers who have animals in sheds that are being finished to the earlier grid system standards. Dunbia’s Mr Dobson said that cattle supplied to his company were coming from finishers who knew what was required; who kept their animals for a maximum of 6 months and no more; and who were well aware of what the customer wants.
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