Search for prime animal suppliers
Scottish meat processor, McIntosh Donald of Portlethen, is looking for increased supplies of prime cattle and sheep to meet soaring demand from Tesco supermarkets.
Sales of beef in Tesco's Finest range - largely supplied by the Portlethen plant - have increased by 34% over the past year and organic beef by 60%, Tesco's producer club manager, J P Dorgan, told the annual meeting in Aberdeen of the McIntosh Donald Beef Producers Club.
Dorgan said initiatives such as increasing maturation from 21 to 28 days to improve tenderness and branded counters to highlight local suppliers were driving sales forward. "Tesco has increased its share of the UK beef market from 30% to 31% and continued expansion will see Tesco stores increase by 2m sq ft in the coming year," said Dorgan. "This is good news for UK farmers as it means we will be looking for increased supplies of both beef and lamb to meet the requirements of our new stores as well as organic expansion."
Demand for organic beef and lamb - currently earning farmers £3/kg for both prime cattle and lamb - was showing dramatic growth, although from a low base, but Dorgan admitted the switch to organic production might not be appropriate for all farms.
"We can certainly handle as much organic beef and lamb as you can supply," he told farmers.
But Dorgan warned that strong demand would not necessarily be translated into significantly higher prices for farmers. Competition between supermarkets was intense and 94% of the population had the choice of shopping in at least three supermarkets.
McIntosh Donald managing director, Alan McNaughton said Scottish producers were extremely fortunate to have Tesco as a major outlet. It accounted for 78% of McIntosh Donald's sales of beef in value terms.
McIntosh Donald is on target to process 80,000 cattle and 177,000 lambs this year, representing a turnover of £80 million.
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