Risk Sharing Sainsbury

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Risk Sharing Sainsburys Sustainable Calf
SchemePhil Nash Sainsburys Dairy Development
Group (SDDG) Farmer09.03.2011
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Background to SDDG

• Established 2007
• 343 dairy farmers selected from 8 UK milk fields
  
• Steering Group committee meet with Sainsburys
  regularly to manage the scheme
• 4 key Workstreams
• Herd Health Welfare
• Collaborative Working (Calf cull cow schemes)
• Business improvement
• Environment Energy

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Calf Scheme

• Established November 2009, to secure a market for
  SDDG BW bull calves
• In partnership with Sainsburys 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.

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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.

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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