18 December 2009

2 minute read

Europe

No doubt in the current ‘new price spec’ situation Northern Ireland producers will have been assessing whether they would prefer such a scheme to apply to themselves. The Republic of Ireland ROI QPS is shown in Table 1 and is based on three sub-grades for each full grade, made possible from the VIA grading of carcases, and the price differentials are shown in cents/kg CW. Farmers will have to decide whether they would be better off marketing their stock in GB, ROI or the local plants.

Ulster Farmers' Union's (UFU) agreement to the Certification Test of a VIA machine in Northern Ireland is conditional on the development of a payments system that will more clearly align the payments to the real market value of the carcase. LMC has undertaken to continue to work with producers and processors to develop such a system based on yield of primals and saleable meat. Ten years ago LMC put together several options for a new payments system based on cutting data derived by the old MLC and LMC, ranging from a system of three payment bands to one with six bands offering greater differentiation.

The latter is shown in Table 2, with the differentials shown as percentages of the base price, reflecting the percentage differences between grades in meat yield. The initiative floundered around the R4H grade when no agreement could be reached between producers and processors as to whether this grade should be at base or penalty price. Given the recent developments in ROI, the changes to the pricing grid in NI and the proposed introduction of VIA, it is likely that the NI payment system will be revisited in 2010 to meet the concerns of the UFU.

The similarity between the ROI and LMC systems can be readily seen in the tables, but a greater number of different prices is possible in the ROI system because of the ability of VIA to determine subgrades. In these tables B = Base Price which may vary from factory to factory; bonuses above (+) and penalties below (-) base are shown in cents/kg in the ROI table and as a % of base in the LMC table.

A 27 per cent bonus/penalty on last week’s R4L base price of £2.54 is equivalent to 68.5p/kg. A seven per cent bonus/penalty is equivalent to 18p/kg, 17 per cent is equivalent to 43p/kg. These p/kg bonus/penalties enable a comparison to the ROI grid which is in cents/kg.

Table 1. The new ROI Quality Payment System (QPS) from 14/12/2009

Table 2. The LMC Grade-Price Structure for NI proposed in 1999

Further Reading

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