ABP and Dunbia under pressure in the UK over cattle grading changes

UK bosses of ABP and Dunbia appeared in front of UK Parliment’s Environment, Food and Rural Affairs Committee this week over changes to the UK cattle grading system.

Tom Kirwan, Chief Executive for ABP UK and Jim Dobson, Group Managing Director, Dunbia were questioned by MP’s following the publication of a AHDB report in recent weeks which concluded that changes to the value of parts of the grid knocked 7%, or £1.1m, from the monthly cattle kill.

Farmers have expressed concerns over recent changes to cattle payment grids. Whilst these changes have rewarded better quality cattle the penalties for animals outside the desired grades have increased significantly, with severe deductions made for heavier carcasses.

The AHDB report compares February 2015 with February 2016 and concludes that changes to pricing across the grid have reduced the overall value of the market from £160.1 million to £159.0 million.

Kirwan said that the new camera grading system (VIA) which is being rolled out in ABP’s UK plants brings a great degree of consistency to the grading. He said the VIA as far as ABP is concerned is not as subjective as a human person grading.

Kirwan described elements of the AHDB report as ‘very emotive’.

“It said we took whatever million pounds out of the supply chain in a month. I do personally not recognise that,” Kirwan said.

He said that before VIA went into ABP’s British plants the average cost of animals was £1,095 while after the technology was installed the cost rose to £1,100.

Kirwan said the grid is not ‘punitive’ for the cattle needed for his company’s customers.

Meanwhile, Dunbia group managing director Jim Dobson told MPs the report should be repeated over a longer period than AHDB’s one-month comparisons.

He said he would also ‘contest’ the findings of the AHDB report.

He also said the report did not take account of the fifth quarter. He said there has been a ‘huge devaluation’ in the value of the fifth quarter over the last 12 months.