Farm Ireland
Independent.ie

Tuesday 6 December 2016

Penalties continue to outstrip 'U' premiums

Martin Ryan

Published 01/06/2010 | 05:00

THE AVERAGE factory premium for U-grade cattle continues to lag far behind the penalty being charged on O-grade animals, the latest factory prices' survey has revealed.

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Department of Agriculture figures for the week ending May 23 show that the average increase in U3 steer prices over the R3 (base) price was 10.6c/kg, while an average penalty of 17.4c/kg applied to O3 steers.

Analysis of the returns from 25 factories found a wide variation in prices, with the benefit on U3 steers ranging from 2.1c/kg to 16.4c/kg, while the penalty applied to O3 steers ranged from 8.4c/kg to 22c/kg.

Under the quality payment system (QPS) introduced at the factories last December, U3 steers were set to be priced at between 12c/kg and 24c/kg over the base (R3), with the premium to be made up by applying a penalty of between 12c/kg and 24c/kg to O3 grade animals. An added bonus of 6c/kg for quality assurance applied to all qualifying animals.

The latest figures show that the average price paid for U3 heifers was 10.4c/kg over the R3 price, with a penalty average of 18.8c/kg for O3 heifers. The bonus on U3 heifers ranged from 3.4c/kg to 16.6c/kg and the penalty on O3 stock varied from 1.7c/kg to 24.7c/kg across the 25 plants.

The processors paid an average of 309c/kg for R3 steers and 315c/kg for R3 heifers for the week.

Donegal Meat Processors (DMP), Jennings (Ballinrobe), and Slaney Meats each paid just over 312c/kg for R3 steers. Kepak (Watergrasshill) paid an average of 324.7c/kg for R3 heifers, but the kill may have included some producer-group stock which earns a premium. AIBP Bandon paid an average of 321c/kg, while Euro Farm Foods and Duleek were on an average of 319c/kg.

Cormac Healy of Meat Industry Ireland said the range of prices is the extreme and not a fair assessment of the overall situation.

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