Task Force agrees 13p per lb beef price gap

By Paul Mooney

A 13p per lb or near £100 per head spread in graded cattle price is recommended in the final report of the Beef Task Force out this week.

This would represent a doubling of the range of premiums and discounts now in operation at meat factories. Participants in the Task Force agreed a three month implementation target for this and similar recommended measures.

The group recommends that a basic price be set for O3 grade steers with premiums and discounts operating above and below this grade. U grade animals would receive a premium ranging from 3p per lb for U5 to a maximum of 8p for U2.

Both R2 and R3 grades would receive a 3p premium, R4L 2p and R4H 1p while R5 carcases would be discounted by 2p. O2 and O5 steers would be discounted by 5p, the two O4 grades by 1p and 2p respectively. All P grades would be cut by 5p.

The Task Force report says that based on 1997 classification figures switching to this grid would be neutral in terms of total payout when compared to a flat price system.

It says that although most cattle were already bought on a graded basis nonetheless a more effective system was needed to ensure that market signals were transmitted to producers and that producers are adequately rewarded for quality production.

The overall objective of the industry will not be achieved unless quality is rewarded.

Implementation of the recommended price grid would be reviewed by a monitoring committee.

The Task Force decided to review at a later date the request from factory representatives for a change to national specifications on carcase trim.

They had lobbied for removal of certain fats - which have no commercial value - before weighing, arguing that this would signal more clearly to producers that over fat carcases meet less market demand.