Farm Ireland

Sunday 17 December 2017

Penalties continue to outstrip 'U' premiums

Martin Ryan

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.

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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