Bull producers losing out on €300k a month
Published 29/02/2012 | 06:00
QPS exclusion sees bull suppliers denied hefty bonus payments
Bull beef producers are losing out on more than €300,000 a month in bonus payments for premium quality animals because they are excluded from the Quality Payment System (QPS).
Prices compiled by the Department of Agriculture show that bull beef producers are being paid less than one third of the premium for the top U-grade animals compared to steer suppliers who are benefiting from the QPS bonus structure.
Prices being paid to producers of bull beef are now being verified on a weekly basis for the first time by the Department.
There has been a massive increase in the number of animals being finished as bulls because they are up to €10-30/hd more profitable at farm level. As a result, bull beef supplies are now running at the same level as steers. However, bulls are grading much better than steers, with 40pc of the bull intake grading U compared to just 5pc of steers.
Despite the proportion of bulls grading U being eight times higher than steers, official Department prices show that the bonus paid on U-grade steers compared to R grades is up to three times higher than the equivalent price differential paid for U and R-grade bulls.
This is because bulls remain outside the QPS. As a result, the bonus payment structure for bulls is based on the old system of U, R, O and P, with no differentiation within the individual grades. This means that the price difference between U and R-grade bulls is a straight 8c/kg. In contrast, the price difference between U and R-grade steers could vary from 10c/kg to 26c/kg, depending on whether the cattle grade R1, R2, R3 or U1, U2, U3.
The Department's data confirm these differences since the price reporting was introduced five weeks ago.