Price Reporting Shows Ongoing Incentives

NORTHERN IRELAND - In the first quarter of 2011, there continues to be a significant difference in the farmgate price paid for FQAS and non-FQAS cattle in Northern Ireland, with the benefits of membership as high as £50 per head for some grades of steers and heifers.

28 April 2011

2 minute read

Europe

However, the application of non-FQAS penalties on young bulls appear to have been less rigid in the last quarter.

These significant differentials appear to have had a gradual impact on the proportion of FQASsteers and heifers in the slaughter mix.

In the period from January to March 2010, 97.1 per cent of steers and heifers in these grades were FQAS. In the same period this year the corresponding figure had crept up to 97.8 per cent.

Since 2001, a non-FQAS deduction has always been applied, albeit to a greater or lesser extent depending on the market. The standard deduction which is typically quoted for out-of-spec stock is £30/head.

However, with the 8p/kg bonus now being paid on FQAS cattle that meet all other aspects of factories’ specifications for age, weight and grade the benefit of FQAS approval is now potentially greater than this. The average difference between non-FQAS and FQAS for in-spec grades now ranges from £30 - £50/head, because of the combined impact of non-FQAS penalties and in-spec bonuses.

While there is a bonus on in-spec steers and heifers, there is no such bonus for bulls. This has meant that the differential between FQASand non- FQAS bulls has not been as wide as that for steers and heifers in the last quarter. Table 1 shows that non-FQAS deductions continue to be applied, with non-FQASbulls attracting 4 - 5p/kg (£13-19 / head) less than in-spec bulls in the last quarter (at selected grades).

This differential is less than during the same period last year when deductions averaged 6 - 8p/kg (£23-24 / head). The proportion of FQAS bulls at these grades is 96.3 per cent, similar to last year’s figure.