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An analysis of charges applied at slaughter suggests that farmers in NI and Britain pay significantly more than their counterparts south of the Irish border.
Shown in Table 1 (prime cattle) and Table 2 (cows) are the charges applied by the main factory buyers in NI. In general, it costs between £15 and £18.50 to get a prime animal killed in NI.
In Britain, across the factories surveyed, the range was £16 to £19. However, in the Republic of Ireland the charges are significantly less, and often around the £10/head mark.
The last time we printed an analysis of kill charges was in 2016, and since then there has been little change in the cost levied on NI farmers.
Across the five main factories in NI, all the charges remain the same, except at ABP where it has cut its waste disposal cost, taking the overall cost for both prime cattle and cows down by around £1/head.
In the period since 2016, NI has gained BSE negligible risk status, which should, in theory, mean that less specified risk material from the animal must be disposed post-slaughter.
Industry estimates at the time NR status was announced in 2017 suggested that it would lead to a saving of around £1.2m per year in waste disposal costs at slaughter. It is a saving that most farmers are yet to see.
Not included in the analysis are clipping costs. From the kill data supplied to us by farmers, this charge ranged from £2 to £5 per head. At a number of factories, the charge is not consistently applied, suggesting that there is some room for negotiation.
Range
As shown in Table 1, deductions at slaughter for prime cattle in NI range from just over £15/head at WD Meats to £18.50/head at Foyle. For a farmer finishing 100 cattle, it works into a difference of £342/year.
However, the range across the factories is much greater on cows. WD Meats are again the cheapest, applying the same deductions on both prime cattle and cows. The most expensive is Dunbia, which continues to implement a hefty £10/head insurance charge.
Meat hygiene
Included within the figures are vet inspection fees, which range from £4.68 to £5.17/head across the factories. These charges are to cover the cost of meat hygiene controls, which in NI are the responsibility of the Food Standards Agency (FSA), with the work undertaken on its behalf by DAERA veterinary service.
All factories also take off £0.40/head, which goes to AgriSearch (£0.10 is then passed on to help fund Animal Health and Welfare NI).
There is also the ongoing Livestock and Meat Commission (LMC) levy of £1 per head, and finally the £0.50 grading fee. That grading fee was £1.25 per head when the work was undertaken by manual classifiers employed by the LMC. The fee was reduced to £0.50 when VIA was introduced in 2011.
But given the carcase classification is a legal requirement for factories, it is debatable whether farmers should be expected to cover this cost. On the kill sheets obtained from factories in the Republic of Ireland (where all cattle are also classified using VIA), no grading fee is charged.
NI kill charges over £8m in 2018
If we assume an average deduction of £16.82 for prime cattle, in 2018, total kill charges across the 336,991 steers, heifers and young bulls slaughtered at NI factories came to £5.7m.
In addition, there were 108,241 cows slaughtered in 2018. Assuming an average kill charge of £20.22, it is a total cost of approximately £2.2m.
The total across all cattle is £7.9m, before clipping. If we assume half the kill is clipped pre-slaughter, is a further cost approaching £1m.
Levy
Within the charges applied at slaughter, factories are obliged under law to deduct £1/head to help fund the LMC.
They also make a separate contribution of £1/head, meaning the LMC received approximately £900,000 from cattle slaughterings in NI in 2018.
In addition, the research and development levy of 40p per slaughtered animal, paid to AgriSearch, comes to just over £180,000 in 2018.
Deductions made on sheep
As shown in Table 3, deductions applied to sheep at slaughter range from £1.22 at Dunbia to £1.47 at ABP. Costs are lowest at Dunbia as it applies a 15p/head waste disposal charge, compared to 20p at Linden and 40p at ABP. The total costs exclude clipping.
On sheep, there is a statutory LMC levy of 20p/head. In addition, factories contribute a further levy of 10p/head, meaning the LMC received around £126,000 in sheep levy income in 2018.
The 5p/head levy for research generated £21,017 for AgriSearch.
Charges at slaughter in Ireland and Britain
Slaughter information obtained for a number of abattoirs in Britain suggests that kill charges for prime cattle are similar to NI at £16 to £19 per head.
Manual grading is still in operation at most factories, and costs £1.45 per animal. Meat hygiene inspection work costs between £3 and £4/head. Waste disposal costs are mostly over £7/head.
AHDB, which undertakes promotional activities in England (similar to LMC in NI), lifts a producer levy of £4.05/head, and receive an additional £1.35/head from processors. In Scotland, QMS takes a levy of £4.20, plus a further £1.30 from processors.
Republic
However, kill charges are significantly lower in the Republic of Ireland, with total deductions on prime cattle little more than £10/head.
Promotional body Bord Bia receives £1.29/head, with meat inspection charges at £4.30, and insurance costing £2.52. The kill information obtained suggests that no charges are applied for waste disposal at slaughter.
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