Foyle Meats move challenges the consensus on QA payments

LAST WEEK the Foyle Meats Group’s only Southern-based plant at Carrigans in Donegal really upped the ante in the beef trade.

While the vast majority of the country’s factories quoted €3.70-3.75/kg for bullocks and €3.80-3.85/kg for heifers, Foyle Meats moved their respective base prices to €3.85 and €3.90/kg, with their 12c/kg Quality Assurance (QA) payment coming on top.

Contacted by this paper, the company provided a complete breakdown of its pricing structure for suppliers.

An analysis of the various pricing tables (printed below) shows that the Foyle Meats Group has adopted a pro-farmer approach to the implementation of QA payments for both bullocks and heifers, as well as advancing their base price by 5-10c/kg ahead of the opposition.

Foyle Meats has chosen to pay the 12c/ kg QA payment on all grades of qualifying animals — stock from qualityassured farms that are under 30 months and with less than four movements.

Other significant initiatives include a 10c/kg bonus payment on all cattle between 320-380kg, and a 30c/kg bonus for Aberdeen Angus stock from 300380kg.

The Angus cattle do not qualify for the 10c/kg 320-380kg weight bonus.

The decision of Foyle Meats to expand the payment of QA bonuses across all grades is very significant, and challenges the selective payment model for these bonuses employed by most other plants in the Republic.

The only negative, if it is a negative, is that to qualify for the QA bonus animals have to be on the qualifying farm for a minimum of 90 days as opposed to the usual 70 days.

Procurement officer Gabriel Lynch told the Farming Independent that the company took the decision to expand the QA payment grid a number of years ago, with the additional 20-day retention period being a customer requirement.

In relation to the higher base prices and the various bonus payments mentioned above, Mr Lynch said the company is “deliberately targeting the better continental animal between 320-380kgs” and is willing to pay better prices to acquire this stock.

Donegal finishers have a long tradition of producing heavy carcases but Mr Lynch pointed out that the preference in the market was for lighter animals.

“320-380kg is a market requirement. Carcase weights above this are not cost effective for us or the producer,” he maintained.

When you start going over the figures you see that anything below O= is more heavily penalised than on other QPS grids, with deductions of an additional 4-10c/kg factored in.

When challenged on this Mr Lynch reiterated that the company was deliberately targeting better cattle.

On the haulage front, this is part-paid by Foyle Meats.

The Carrigans plant slaughters around 1,500 cattle a week.

THE DECISION TO EXPAND QA BONUSES IS VERY SIGNIFICANT