The first OTM beef prices are significantly higher than the price being paid on the Over Thirty Months Scheme, almost a month after the rule change that now sees OTM cattle entering the food chain - subject to a rigorous BSE test.
“It’s difficult to be absolutely accurate about the price of OTM beef as the number slaughtered is still relatively low,” said the MLC’s consumer affairs director Richard Lowe. “But it is looking to be in the £1.15 to £1.20 per kg deadweight range.
“This compares favourably with the OTMS compensation price of
£0.86 per kg and the prime beef price, which is currently north of £1.90 per kg.”
He added: “We are encouraged by the steady start of the return of older cow beef to the food chain,” he added.
“As we predicted, there has been no negative consumer reaction to the reintroduction, and we look forward to rapid demand growth from those supplying beef to both retail and foodservice as the market reacts to the opportunities for import displacement.
“We think the New Year will herald a big growth in demand, which at the moment is muted.” Lowe said that it was not surprising that the current numbers of cattle being slaughtered under the new rule were relatively low. “It’s to be expected given the forward positions taken by many in the trade leading up to Christmas, and also by the need for proper finishing to be re-established in the dairy sector.”
The OTMS scheme is due to end towards the end of January. An exact date has yet to be confirmed, but it is thought that it will end on January 22 and be immediately superseded by the Older Cattle Disposal Scheme (OCDS) on January 23. The OCDS is needed during the next three years to take cows born before August 1996, which are permanently banned from the food chain.
Rachael Porter