Teagasc has been tasked with a large-scale review of the Quality Payment System (QPS) grid to see if it is fit for purpose in the current market climate.
Donagh Berry told the Irish Farmers Journal: “The review will look at the possibility of considering any new technology that is available to us like meat yield or meat eating quality data, should such become available.
“We have to open our minds to all potential options – one such option could be an A+B+C-D-E-F system, like the A+B-C milk solid payment system in the dairy industry where A is the fat, B is the protein and C is processing cost.
“For example, A could be weight, B could be conformation, C could be eating quality or breed, while E could be bone, D could be boning costs and E could be the carbon footprint of the animal. The weight component could even be sub-divided into individual primal cuts if such data were ever available,” Berry explained.
“We have to realise that consumers’ eating habits are changing and it’s important that the industry changes with them.”
Teagasc’s initial desktop review of the grid suggests only a minimal 1c/kg change to the differential between carcase grade subclasses to update the grid from its 2009 format.
Current beef prices are averaging almost €1/kg higher than the reference price of €3/kg used in 2009 and some had argued that the price differential of 6c/kg between subclasses should be increased to 10c/kg.
The review used up to date prices (2017/2018) on retail cuts from Meat Industry Ireland and applied them to the original work.
The results indicated a 1.23c/kg increase in the differential between grades, which would effectively change it from 6c/kg to 7c/kg.
The review also indicated a stronger reduction of 1c/kg more in the fat subclass deduction differential. It is not clear at this stage whether the industry will apply the 1c/kg change, but initial reaction has been the industry representatives would be slow to change for 1c/kg.
The thinking is that the industry would be better to wait and make bigger changes to the grid when Teagasc completes the next stage of the grid review; if a grid is even the way forward.
Speaking to the Irish Farmers Journal, Berry said the retail prices of steak and high-value cuts had increased by 8% since 2009, while forequarter cuts or lower-value mince cuts increased by 57% over the same period.