Factories confirm fat penalties hike
Dawn Meats to end 6c/kg concession and other processors to follow
Published 22/06/2010 | 05:00
The factory penalty on higher fat score steers and heifers will be increased by 6c/kg within a fortnight.
Dawn Meats has confirmed that a concession on the 6c/kg penalty on 4+ animals is being discontinued from the end of June.
A spokesman for Meat Industry Ireland (MII) said other major beef processors will also cancel the concession, which was granted soon after the introduction of the quality payment system (QPS) for cattle.
The concession was due to end in April but the factories extended it by two months following intense lobbying by the farm organisations.
The penalty, applied to O-grade animals with 4+ fat scores, will increase to an average of 30c/kg and range from 24-36c/kg, while 4+ R-grade animals will also be penalised by between 6c/kg and 12c/kg.
Once the new penalty is imposed the average return on O4+ animals will be €105/hd below the base price (R3).
The processors have also indicated that a further reduction of 6c/kg will be applied from the end of October when they withdraw the concession on 4= grade animals.
It is estimated that the combined effect of both price changes will be a reduction of more than €3m in the value of the annual kill, based on last year's factory throughput.