Kepak is to partner with Glanbia in offering a contract price to rear dairy-bred calves to beef provided farmers purchase inputs from a certain source.

The Irish Farmers Journal understands that discussions between Kepak and Glanbia to establish an integrated supply chain agreement are at an advanced stage.

The price agreement would kick in if farmers buy all inputs, such as milk replacers and feed from Glanbia and animals are slaughtered in a Kepak factory.

Suckler bonus

News of the development comes as Kepak winds down the bonus it offered suckler-bred heifers through its KK club.

Farmers will no doubt question the processor’s ability to offer contract prices for dairy-bred stock, while on the other hand Kepak is reluctant to offer similar arrangements for suckler-bred progeny.

Irish Farmers Journal analysis indicates that for a steer or heifer dairy beef system to be economically viable, a price in excess of €4.30/kg would have to be paid for these animals.

ABP Food Group

The move will see Kepak follow the ABP Food Group in offering a contract price for dairy-bred stock significantly above the price it is paying for suckler-bred animals.