Difficult winter ahead for Scotch red meat producers

Sheep and pig farmers in Scotland should expect difficulties in the months to come, according Quality Meat Scotland’s (QMS’) annual review.

Hard times will be caused by a shortage of good-quality silage, as well as soaring straw and protein prices, members heard at the annual review launch in Stirling earlier this month.

However, QMS chairman Jim McLaren said despite the difficult prospects, the Scottish livestock industry looks set to move into 2013 “in good shape”. He also explained that the red meat industry had numerous reasons to feel confident about the future, especially in its Scotch Beef, Scotch Lamb and Specially Selected Pork brands.

The Scottish red meat industry contributed a record £2.1bn to Scotland’s economy and Scotch Beef was named the biggest selling Scottish food and drink brand in Great Britain with sales totalling £247m. “We are in a strong position to take advantage of increased demand for quality red meat from a growing population and an eventual upturn in the global economy,” McLaren said.

British Cattle Movement Service (BCMS) figures showed that, in June, calf numbers in Scotland stabilised and had managed to increase slightly over the past 12 months, despite a reduction in cow numbers.

McLaren said the information suggested that those who left the industry were the less-efficient producers, which “put us in a strong position in terms of productivity and animal health,” McLaren said, adding: “However, it is important producers continue to take advantage of opportunities to further improve efficiency.”

The report also revealed the results of the Scottish census, which indicated a continuing and unwelcome reaction in breeding ewe numbers. And although there has been a decline in sheep numbers, this had contributed to improved farmgate prices and margins for sheep farmers. The report also stated that there was little evidence the flock was growing.

Although higher prices had helped to improve farmers’ margins, higher sheep prices are causing problems for consumers and executive manager for the Scottish Association of Meat Wholesalers (SAMW) Ian Anderson said: “On the sheep side there’s an issue, as the price has been high because the numbers [of sheep] are declining and lamb is very expensive for consumers.”

Recent figures from Kantar Worldpanel backed this up and showed that 48% of consumers were finding it harder to meet monthly budgets than one year ago. Also, 79% of consumers said they now expected their income to either decrease or stay where it was over the next year.

Tight supplies of raw materials, along with difficulties faced by the grocery sector are also areas causing problems for the Scottish meat industry and McLaren described this as a “pincer effect”. He said: “We have repeatedly emphasised the importance of critical mass to the processing sector; without that, many are struggling to make a decent margin, never mind finding the capital they need to reinvest.”

QMS finances

Chief executive of QMS Uel Morton said that delivering value for money remained core to every activity the organisation undertakes on behalf of the industry.

In the 12 months to 31 March 2012 the organisation received £4.85m in statutory red meat levy, which is the same as in the previous 12 month period. The total income for the whole year was £7.13m, which was £5,000 down on the previous year.

Morton said: “Another important part of our strategy is securing additional financial support for the Scottish red meat industry. During the past year QMS secured almost £900,000 in grants for work on behalf of the industry.”

“It is worth pointing out that for each £1 QMS spends on funding research and development projects £10 is invested as a result of staff working to lever financial support from other sources.”

Related news:

>Margins for Scottish producers remain "wafer thin" warns QMS

>Confidence 'not yet' returned to Scotland, despite record figures


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