Markets

Chris Howie: Understanding processor grids and kill sheets

Chris Howie, Stockco, 16/04/2020

As a producer of livestock, all of the work invested in getting an animal ready for direct consignment sale becomes reliant on understanding two important pieces of information – the ‘grid’, and the ‘kill sheet.’

Chris Howie

The grid is the document supplied in various formats by processors, feedlots and exporters to outline their specification requirements and the various pricing applied to each of these requirements.

Historically, the grid ‘sweet’spot’ tightens through periods of high supply – weight ranges, breed characteristics and fat cover targets become narrower. During times of limited supply, the window expands, allowing a wider specification range to meet the pricing band.

These grids can relate to liveweight or dressed weight, with significant variations between each grid – so never assume that one is the same as the next. Pricing is determined by the conditions outline in the individual grids – delivery point, specification, weighing method – full-body, half-body, liveweight – individual / truck etc. With significant changes in volume, weather or international influences grids can change on a daily basis up or down. Even with long term supply arrangements do not assume grids remain the same.

Without being glib producers need to be aware that It is rare for all of the consignment to land inside the top price box unless the stock are drafted from a large selection. This makes it very important to understand what the price differential for those that “miss the grid” are.

The only way to effectively deliver to a grid is for you to have an intimate understanding of your livestock and the variables.

This requires knowing but not limited to the following – Breed, liveweight, age, time off feed and expected shrink % (curfew), Joining status, wool weight (sheep), grass seed (sheep), dog bites, bruising (Yards and carriers), Rehydration, distance to travel, MSA grading requirements, preparation windows to avoid dark cutters and most importantly what the penalties are for missing the specification..

Once you have captured all of this information you then need to assess what the dressing percentage or liveweight delivery will be. Dressing percentage is reliant on the condition score of the animal, time it has been in that condition, breed or cross and curfew weight loss.  Liveweight is determined by full weight less curfew. This maybe a guesstimation or a predetermined percentage number – pencil shrink.

It is very easy to get all of the preceding pieces right yet forget about the curfew shrink when weighing full out of the paddock.

As an example:

You weigh steers full at 550kg out of the paddock and estimate their dressing percentage at 53%. Lighter than you normally sell but feed is starting to slip away. However, you did not allow for the curfew of 5% gut fill (this % can vary dependant on how long the livestock has been in condition and how “green” the feed is). “The Grid” sweet spot is 280 – 320 kg dressed and you are expecting your steers to come in at around 290kg. Because the curfew deduction was missed the dressing percentage is overstated and the steers come back at 277kg. It doesn’t sound like much but it means you are 13 kilo per animal lighter and you have missed the pricing window as well. This is normally when the arguments start as the $ value reduction can be significant. Allowing for the diminished quality of the feed potentially impacting dressing % is often missed at the end of the season creating “slippery” livestock that do not yield. Again creating a difference between the expected return and the actual result.

Automatic weighing and drafting systems do not compensate for condition yet so be careful especially with lambs.

Kill sheets & delivery dockets

. These are the birth certificate of the transaction and determines how much money moves. All producers should ensure they receive copies of their kill sheets & delivery dockets. Generally, the data breaks the consignment into categories determined by weight, fat cover, dentition and penalties. Your consignment can be cross referenced directly back to Livestock production and potential improvement within your operation. Aligning your sale process to kilograms sold instead of number of head moved is an excellent management tool

Don’t just look at the bottom number which is the average but consider the document in entirety. Look at the animals that missed “The grid” and ask why? Yield, time off feed, weather, pre preparation methods. Sheep tend to have more outside influencers that can create a requirement to trim carcases than cattle – grass seed, Cheesy gland, arthritis, pleurisy, sheep measles etc. Wool tends to hide a lot from plain sight.

By managing the consignment in a different manner or introducing animal health protocols could you have created a better return for the same work invested?

Take the time to understand this important component of your income information. Those that do use the information and identify opportunity within their business to implement positive change can create a significant income improvement with minimal cost.

If you are unsure about the grid or kill sheet speak to your agent or the provider of the information and ask them to run through it with you.

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