Beef industry urged to work together for greater returns
Published:  23 August, 2016

The British beef supply chain is faced with a lack of transparency that is affecting returns for all, according to the Agriculture & Horticulture Development Board (AHDB). 

To overcome such obstacles, the levy board has called on the industry to work together to better deliver greater efficiency.

Using a series of analyses into current beef carcase pricings as a premise, AHDB Beef & Lamb has suggested that the market is not working to the benefit of producers or processors. Producers are experiencing a loss in returns while processors are not getting the mix of carcases that their customers require, concluded AHDB Beef & Lamb.

The research was undertaken after reports of changes to pricing specifications by processors, although the resulting analyses found difficulties on both sides.

“A more transparent environment, allowing more positive, open relationships to develop across the supply chain, would potentially benefit everyone,” said Stephen Howarth, AHDB market intelligence market specialist manager.

“It would give producers more certainty about future market requirements, encouraging them to make the changes needed to deliver consistent carcases. In return, processors would get more certainty that they will be able to secure the supply they need. It would be a clear win-win for both groups of levy payers.”

The first stage of AHDB Beef & Lamb’s analyses investigated the extent to which prime cattle being delivered to processors met their requirements, while the second looked at levels of penalties. The final part of the research showed that prices paid for prime cattle were only partly related to meat yields. Key findings of the report were:

•    Only half of the cattle slaughtered in the months analysed hit the suggested specification range
•    Less than a quarter of male cattle hit both target classification and the narrowest weight range
•    The fragmented nature of production is one factor preventing carcases being more consistent
•    Only relatively small adjustments to carcase classifications are needed for producers to significantly improve returns

To help monitor pricing trends in the future, AHDB will be implementing changes to price reporting systems in the coming months.

All three ‘Analysis of Cattle Prices and Specifications’ reports can be viewed here.