In support of this morning’s separate discussion piece on HGP-use in beef production systems, Beef Central has contacted major processors representing around 60pc of the national kill to establish their pricing policies on implanted versus no-HGP cattle.
Some companies have recently changed their HGP discount policy, while others are considering their current position in the face of extreme difficulty in sourcing slaughter stock.
But quite clearly, the survey indicates there is little or no discounting now applied on HGP-treated cattle in most plants that process both implanted and non-implanted stock.
Note that the references below relate to everyday ‘commodity’ cattle, not animals entering commercial brand program business, or specialised segments like PCAS, EU-eligible or Certified Organic.
Commodity cattle still represent about 85 percent of many large processors’ kills, it is estimated.
JBS’s Northern division (Queensland operations, plus feedlots) makes no price distinction between implanted and non-implanted slaughter or feeder cattle, outside certain brand programs and specialised markets like EU. JBS Southern’s beef operations at Brooklyn (Vic), Scone (NSW) and Longford (Tas) kill HGP-free cattle only. Implants are not permitted for use in Tasmania.
After several years where it offered a 5c/kg premium for HGP-free cattle in its direct consignment grids, Teys Australia recently discontinued the incentive. When the price distinction was originally introduced, the China export market (no HGP) was growing rapidly, but it has since moderated, which may have influenced Teys’ thinking. The other factor is the broader challenge faced by export processors everywhere in sourcing cattle, regardless of HGP status. Teys pricing policy on HGP status applies across its entire northern/southern processing operations, from Naracoorte in SA to Biloela and Rockhampton in Central Qld.
Apart from certain commercial brand programs, NH Foods, the nation’s third largest beef processor, has no price distinction in its grids for Mackay and Oakey plants in Queensland, and the Wingham Beef Exports plant in NSW on HGP status. There is no price segregation on treated versus non-treated cattle in the commodity descriptions, including grassfed cows and bullocks.
With recent grid changes made by Teys Australia (see above), Inverell-based Bindaree Beef appears to be the only large east-coast beef processor which still carries an HGP penalty on grassfed cattle in its grid. Bindaree’s grid currently applies a 5c/kg discount on implanted cattle, but a spokesman told Beef Central that the policy is currently under review. Again, the emergence of the China export market two years ago was offered as one reason for the grid differential, but volumes into China have since slowed down. The sheer competitive pressure to source killable cattle this year may also influence Bindaree in its decision. “It’s increasingly difficult to compete on cattle in Queensland if you are not willing to draw a line through HGP,” a company spokesman said.
Kilcoy Pastoral Co:
Dedicated Queensland grainfed processor Kilcoy Pastoral Co conducts a non-HGP kill a couple of days each week, for a range of export markets looking for a 100-day HGP-free product. At the moment the grid price differential is 30c/kg, dressed weight. This market segment has grown for Kilcoy, from a single shift non-HGP kill each week earlier. Supply comes both from commercial feedyards which feed both implanted and non-HGP cattle in separate pens, to several yards that feed HGP-free only. The trial started well over two years ago, pre-dating the arrival of the China HGP-free chilled market. Kilcoy is one of just 11 Australian plants eligible to export chilled beef to China. In order to successfully feed grainfed cattle for 100 days without implants, they need to be the right type of animal, and the right weight, the company advises suppliers. “A straight Brahman at 380kg liveweight at entry is going to struggle,” a company spokesman said. “It’s best suited to good crossbreds, perhaps with a bit of Euro, 400kg plus.” The resultant beef is used in a non-HGP product category, rather than a specific brand program. “We find more and more export customers asking for HGP-free meat,” the spokesman said.
Thomas Foods International:
TFI’s beef kill at Murray Bridge in South Australia has traditionally applied a 5-10c discount on HGP-treated commodity cattle (not part of the CAAB or Angus Pure bred programs), but said it was treating the issue on a ‘case-by-case basis’ under the current very difficult supply conditions.