Pros and cons of supplying lamb to a super market

what are supermarkets like to supply with lamb and what kind of contracts are their out their , atm selling all lamb in local market but Im lossing over half a day , Is it worth it or is it just as much hassle with supplying straight onto the dead
 

neilo

Member
Mixed Farmer
Location
Montgomeryshire
what are supermarkets like to supply with lamb and what kind of contracts are their out their , atm selling all lamb in local market but Im lossing over half a day , Is it worth it or is it just as much hassle with supplying straight onto the dead

If you get a supermarket contract, you will certainly be selling ‘onto the dead’. There will also be a few extra stipulations/paper exercises to do, depending on which retailer.
If you are FA already then most of it is not really an issue, although you can probably expect carbon audits to be necessary before long.
 

Anymulewilldo

Member
Livestock Farmer
Location
Cheshire
One of my friends and his son have been on a supermarket contract for 3 years with lambs now. His price is good and it's supposedly agreed in advance so he has a rough idea where he's headed. The wagon comes, the lambs go, cheque or BACS within 2 weeks. Simple

BUT, he was showing me the new stipulations to his contract that are either already on or will be shortly, I.e. Heavy Penalties on carcasses over 22kg and anything out of spec, underwritten price only applicable to home bred lambs and a couple of other paperwork exercises.

So the initial money is better but there is a hook in that big ball of candy floss.

I looked at the idea and decided I'd stick to the markets given most of our lambs are bought in and I will buy pretty much anything (except Swale wethers) if there looks profit in them. So not ideal for producing a uniform product that the supermarket wants
 

unlacedgecko

Member
Livestock Farmer
One of my friends and his son have been on a supermarket contract for 3 years with lambs now. His price is good and it's supposedly agreed in advance so he has a rough idea where he's headed. The wagon comes, the lambs go, cheque or BACS within 2 weeks. Simple

BUT, he was showing me the new stipulations to his contract that are either already on or will be shortly, I.e. Heavy Penalties on carcasses over 22kg and anything out of spec, underwritten price only applicable to home bred lambs and a couple of other paperwork exercises.

So the initial money is better but there is a hook in that big ball of candy floss.

I looked at the idea and decided I'd stick to the markets given most of our lambs are bought in and I will buy pretty much anything (except Swale wethers) if there looks profit in them. So not ideal for producing a uniform product that the supermarket wants

It's possible to do both.
 

taff

Member
We signed up to a contract for our autumn born lambs it's been something we've been working towards for a while as the prices have always been better there than what we've had in market or with the local cooperative that is until this year!!!!! Be careful what you wish for would be my advice and remember most people on contract will tell you it's the best thing ever when possibly there is more to it than meets the eye
 

neilo

Member
Mixed Farmer
Location
Montgomeryshire
It's possible to do both.

Not with that contract that gives you a forward price for the year. 100% commitment required and no bought-in stores. It’s obviously not going to appeal to everyone, but for producers that produce most lambs in spec and don’t buy in stores anyway, it is worth considering.

You are only committed to one year at a time. If you don’t like the terms, or the price, then don’t enter the contract. Knowing what price you will get a year in advance is quite valuable, particularly with the uncertainty over future trading agreements & tariffs.
 

neilo

Member
Mixed Farmer
Location
Montgomeryshire
We signed up to a contract for our autumn born lambs it's been something we've been working towards for a while as the prices have always been better there than what we've had in market or with the local cooperative that is until this year!!!!! Be careful what you wish for would be my advice and remember most people on contract will tell you it's the best thing ever when possibly there is more to it than meets the eye

The current market price isn’t much different to what those on forward priced contracts are on. Other retailers use a model of sqq + a premium though, which will presumably give a bonus even over where the market is now.
 

unlacedgecko

Member
Livestock Farmer
Not with that contract that gives you a forward price for the year. 100% commitment required and no bought-in stores. It’s obviously not going to appeal to everyone, but for producers that produce most lambs in spec and don’t buy in stores anyway, it is worth considering.

You are only committed to one year at a time. If you don’t like the terms, or the price, then don’t enter the contract. Knowing what price you will get a year in advance is quite valuable, particularly with the uncertainty over future trading agreements & tariffs.

It's simple enough to set up a separate company to trade store lambs. I have s customer on a forward price contact who sold a large proportion of this year's crop store.
 

neilo

Member
Mixed Farmer
Location
Montgomeryshire
It's simple enough to set up a separate company to trade store lambs. I have s customer on a forward price contact who sold a large proportion of this year's crop store.

I’ve no doubt an unscrupulous operator would be able to find a way round most things, but why would he choose to sell his lambs store, if he had such a contract in place? Unless they were as stores to someone else on the same contract (there is internal trading), who would presumably be happy to pay above market because he knew what price he could kill them at & when?
 

unlacedgecko

Member
Livestock Farmer
I’ve no doubt an unscrupulous operator would be able to find a way round most things, but why would he choose to sell his lambs store, if he had such a contract in place? Unless they were as stores to someone else on the same contract (there is internal trading), who would presumably be happy to pay above market because he knew what price he could kill them at & when?

Nothing unscrupulous about my customer. Lambs were sold due to lack of feed, and with the full blessing of the retailer. Apparently the retailer were more than happy with the lambs being sold on the open market, and expressed a preference that the producer destock to match carrying capacity rather than finish lambs on concentrates.

I wouldn't call having a separate company to trade store lambs unscrupulous. It's spreading risk, which is good business. If the retailer has a contract with one company, then that company only binds that company. It doesn't extend to other companies the directors may have an interest in.
 

Wooly

Member
Mixed Farmer
Location
Romney Marsh
So for the farmers that are on forward price contracts, what are you been paid at the moment ?

I will take a guess............. it's less than what you would get selling them in the livestock market !! :unsure:;)
 

DanM

Member
Livestock Farmer
Location
Wiltshire
Not with that contract that gives you a forward price for the year. 100% commitment required and no bought-in stores. It’s obviously not going to appeal to everyone, but for producers that produce most lambs in spec and don’t buy in stores anyway, it is worth considering.

You are only committed to one year at a time. If you don’t like the terms, or the price, then don’t enter the contract. Knowing what price you will get a year in advance is quite valuable, particularly with the uncertainty over future trading agreements & tariffs.

With one retailer contract you’re able to run more than one flock. So store lamb enterprise can be run as separate flock and not sold on contract. You can only supply lambs on contract terms that are not born on your holding if purchased from another contracted flock.

12 months prices fixed in advance, is of course a big attraction to these contracts. However, that attraction fades somewhat when you realise the “brexit price clause” allows them to tear it up if the negotiations render the contract no longer in the retailers favour!!!:mad:
 

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