Tom Rookyard, AuctionsPlus Market Insights
August 1, 2019
Cattle eligible for the European Union Cattle Accreditation Scheme (EUCAS) have long held the notion of strong market premiums. Indeed, a recent discussion with a livestock agent after EU feeder steers on AuctionsPlus made 378c/kg liveweight on the 31st of May 2019, begged the question, is the EU scheme still relevant and what are those premiums worth to producers?
To answer this, the AMI team looked at an average price for EU versus Non-EU Angus steers sold online from 2012 to 2019, broken up into three weight ranges: 0-280kgs, 280kgs-330kgs and 330kgs+.
Table 1, highlights the premium which EU accredited cattle receive across the three weight categories. Across all years, EU Angus steers sold through AuctionsPlus delivered premiums. Interesting, the largest price gap seen is in the current 2019 season. This additionally coincides with the largest offering of EU Angus steers through the online platform, making up 40% of the total Angus steers offered between Jan-June 2019. The management practices required for the EU accreditation scheme have long instilled confidence in buyers, especially online. Vendors are audited regularly and consequently have to run their operation to a very high standard.
From a growers perspective keeping an EU accreditation comes with its own challenges. The cost of sourcing and purchasing EU stock can be significant. Further to this, if producers want to supplement income during market downturns from trading stock, they are confined to the EU program. Landmark Boultons Walcha livestock agent Mat Larkings feels that the management practices for EU programs are important and set high standards within the industry. However, he sees Grassfed programs as an alternative and potentially easier market to target. “It is a mob based system; producers do not have to compromise their accreditation”. Mr Larkings has seen some clients step out of EU program, and feels that Grassfed is an important step in moving with changing consumer demand surrounding providence of food. “The Grassfed programs evokes an image of cattle standing in a paddock full of green grass, and that is great for the industry”.