Tradable slaughter rights idea useful but may not be the answer

The Tradable Slaughter Rights concept, raised by me several weeks ago and promoted last week by Mike Petersen, was first proposed by Pappas, Carter, Evans and Koop in 1985. But its purpose was specifically to solve the problem of an industry that consisted of a lot of weak competitors with little innovation or variation in killing charges. The report identified excess costs between farmgate and shipside of $100 million or 8%.

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Fixed price contracts not the answer

When farmers want certainty of income and livestock prices aren’t very good, thoughts often turn to fixed price contracts. But they have never really taken off because I suspect neither farmers nor meat exporters are very keen on them, although Silver Fern Farms continues to offer its Backbone contracts with reasonable uptake.