Risk Sharing Sainsbury’s Sustainable Calf SchemePhil Nash Sainsbury’s Dairy Development Group (SDDG) Farmer09.03.2011
Background to SDDG • Established 2007 • 343 dairy farmers selected from 8 UK milk fields • Steering Group committee meet with Sainsbury’s regularly to manage the scheme • 4 key ‘ Workstreams’ • Herd Health & Welfare • Collaborative Working (Calf & cull cow schemes) • Business improvement • Environment Energy
Calf Scheme • Established November 2009, to secure a market for SDDG B&W bull calves • In partnership with Sainsbury’s beef supplier • Unit at Tetbury (other units in South West and Midlands) • 2 week old calves collected direct from farm (as per rearing protocol) • Calf price decoupled from the market price to cover cost of production • Agreed a forward price contract with rearing/ finishing unit.
Rearing Units for SDDG calves from farms under TB restriction • TB Units • Unit 1 established February 2010 – Cirencester, Gloucestershire • ‘TB Exempt’ Unit’: calves collected from a farm under TB restriction & will remain on this rearing/ finishing unit till slaughter • Unit 2 established November 2010 – Tiverton, Devon • ‘TB Quarantine Unit’ – calves collected from a farm under TB restriction and have 2 TB tests on the rearing unit to gain a TB free status. These calves can then be moved to another finishing unit. • Calf price same as those from un-restricted herds • Only scheme to pay a sustainable price for calves from TB restricted farms • 800 SDDG calves reared through these 2 units.
Were does the risk lie? • Farmer • They are guaranteed a market for their calf that is sustainable (calf price covers the cost of rearing & includes a margin) Processor • Normally buy cattle based on the market price. The high feed price currently challenging but the supply chain is guaranteed and the production standards are known Sainsbury's - Ring fenced & secured part of their beef supply however currently high feed prices are making it more expensive, but taking the long term view