What could a beef contract mean for you?

The launch of the world’s first smart, data-driven beef contract from specialist app business, Breedr, sets a secure price 24 months ahead, with fluctuation if price increases arises.

The app is free to use, although commission fees do apply. This new way to buy and sell livestock is based on lifetime animal data and weights to ensure payment within 72 hours of collection, along with an option of an advance payment.

Rearers can opt to be paid on a per kg growth basis, eliminating the need for capital outlay on youngstock.

The contract could be worth more than £130m to British beef producers over the next seven years, the company has said. Its network now has more than 2000 members and 120,000 registered animals across the UK, many of whom are joining forces to create integrated supply chains to further improve efficiencies.

By collating data on genetics, growth rates, health, and carcass grades, producers can identify the most productive breeding lines and management methods, optimising productivity throughout the supply chain.

The price certainty gives producers confidence to invest, especially to new entrants as it allows farmers to gain their working capital to ensure they can budget ahead, knowing what their cash flow will be for the year.

Prices for the contract are well above the five-year average, although that's dependent on farms, location and breeds of cattle.

“As beef producers ourselves, we know how tricky it is to plan ahead with confidence – one batch of bad calves can ruin a farm, as can a downturn in the beef market,” said Ian Wheal, founder of Breedr.

“If the trade dips, farmers can’t afford to keep their livestock for an extra few months until the trade rises again. They have to sell them immediately, so this creates a good price all year round and you know what to expect.

“But by making better use of data we can buy and sell with transparency, predict growth rates, and know that we’re supplying the processor with what they want – ensuring a secure end market and price.

"The data used to improve efficiencies throughout the supply chain, will not only reduce the industry’s environmental footprint but also improve the consistency and quality of the end product," he added.

"Trade has been blooming this year and long may it continue, although it only makes up for the bad years beef producers have already received, and with the ongoing uncertainties that lies with Brexit, trade deals and easing lockdown restrictions there is a lot of indicators that beef price could dip.

"As consumers start to go back to normal life will they continue to cook at home and support local?," he said.

The underling issue is no one has that crystal ball to say what the beef price will do over the next 12 months.

“Being able to plan ahead with certainty finally gives farmers the peace of mind they need to invest and build profitable businesses. The support network is moving the industry forward, through collaboration and a great discussion group to learn from,” he added.

Farmers using the free app are finishing animals five months earlier than the industry average, with 24% more carcases reaching the target specification. They are saving 1.8 tonne per head on feed and reducing their carbon footprint by 20%.

Adam Quinney, chair of beef and lamb at AHDB, added: "At AHDB we are very supportive of technology that is helping bring certainty, and collaboration between farmer groups in the supply chain.

"The benefit of these supply chains encourages improvements to genetics, farm productivity and therefore environmental impact in the long term.

Mr Wheal concluded: “We run regular webinars for our members, bringing in expert speakers to help farmers improve efficiencies every step of the way. This is a true community of forward-thinking farmers, who are sharing their own top tips and forming robust business partnerships.

"Together, farmers have the power to drive this positive change.”