ABP has some 25,000 cattle under contract through its Blade Farming system in the UK, ABP’s Chief Executive in the UK Tom Kirwan revealed when he appeared before a UK Parliamentary Committee recently.
ABP set up its Blade Farming business in 2001 and is a franchise business for the beef finisher which means that farmers sign forward price commitments backed by the abattoir they supply and pay Blade a franchise fee as the cattle are slaughtered.
Beef finishers have a full range of forward pricing mechanisms available that are guaranteed for the lifetime of the animal signed to the contract.
The rearing operation is financed by Blade and the calf rearers are paid a management fee for calves that are reared to ABP standards.
At the parliamentary committee, Kirwan noted ‘changing times’ in the beef supply chain.
We have 25,000 cattle where we bring young people into rear calves. It is a vertical supply chain.
“What is happening in the supply side is changing and I would say it’s changing at pace.”
Kirwan said long-term contracts its a growing trend within the ABP supply base.
“Farmer suppliers that we buy from trust us with those contracts and we have never reneged on them,” he said at the committee meeting.
Blade uses a network of dairy farmers to supply good quality young calves at 14 days of age.
ABP says it has breeding schemes in place using the best genetics available and encourage calf suppliers to take advantage of genetics to produce calves that will command a premium in the marketplace.
More recently it has secured Aberdeen Angus genetics using DNA tested sires that are proven to have some of the best growth potential and eating quality in the world.
Blade is involved in genetic improvement, calf selection, calf rearing, beef finishing, farm finance, technical assistance, animal health and raw material sourcing to ensure our cattle are fed correctly.
ABP says that key the operation is to ensure it delivers to our customers what they want and that its supply chains are efficient and sustainable.