Farm Ireland

Saturday 24 March 2018

Let's have the truth on the grid changes

Have the beef processors unilaterally changed the rules governing the Quality Payment System (QPS) for cattle?

Has a two-tier price grid been introduced by the factories?

These are the questions farmers are asking in the wake of reports that factories are heavily discounting stock that does not meet the criteria for the In-Spec Quality Assured (QA) bonus.

Under the grid, a bonus of 12c/kg was supposed to be paid for In-Spec QA cattle, but all stock were to be bought off the same base price.

This is not happening at the moment and is unlikely to happen any time soon.

Farmers who contacted the Farming Independent over the last fortnight confirmed that discounts of between 10c and 30c/kg below the quoted base price were being imposed on cattle that did not meet the In-Spec QA bonus criteria or were from non-QA herds.

The penalties vary from plant to plant and from one load of cattle to another. The 30c/kg penalty seems to have been levied in the west and south, while it falls to 10-15c/kg in the east.

Sellers also report deals being done on the penalties for mixed loads of In-Spec and 'out-of-spec' cattle.

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Whether the cattle are from a Bord Bia QA herd or not also appears to have a big bearing on the price.

The penalties are severe and can equate to as much as €130/hd – a serious hit when taken across a load of cattle.

Speaking to the Farming Independent, a spokesman for Meat Industry Ireland (MII) – the processor representative body – insisted that the factories were sticking to the grid and that no unilateral changes had been made by the processors. He also denied that a two-tier pricing system was now in play.

However, the reality on the ground does not tally with these assertions.

It is patently obvious that a new penalty is being imposed by the factories for cattle that do not meet the In-Spec QA requirements. It is also clear that even more severe penalties are being levied for cattle from non-QA herds.

This is a unilateral shift from the grid, whatever way you want to dress it up.

The factories claim the penalties imposed on non-QA stock reflect the changes that have taken place in their markets in the wake of the horsemeat scandal.

They point out that outlets for non-QA beef are limited and prices are discounted as a result.

There is no arguing with that. But if the grid has been fundamentally changed, the least the factories could do is be open and honest and tell farmers the truth.

Irish Independent