Scotch beef producers face lower margins

Poor exchange rates, reduced demand and full abattoirs have conspired to force the price of Scotch beef down, leaving many Scottish prime beef producers struggling to make a margin, according to the National Farmers Union Scotland.  

Last year, farmers were able to command around £1,300 per animal, but this has now dropped to nearer £1,200.

“Good weather in April meant that demand tailed off somewhat as people tend to cook fewer hot meals in good weather,” said communications director Bob Carruth.

“The number of cattle coming forward has also been quite plentiful, so the abattoirs have been full, meaning farmers have been struggling to get their cattle in.”

When asked what impact the price drop would have on beef farmers, Carruth told Meat Trades Journal: “Margins at farm level for almost any commodity – beef, sheep, cereals, milk – tend to be very thin and subject to price volatility. Differences of between £60 or £100 per head between this year and last year for prime cattle can be the difference between a small profit and a loss.”

To help address these issues, the NFU, which is worried that this is becoming a cyclical problem, is planning a series of livestock roadshows throughout Scotland from the autumn, providing farmers with assistance and advice. “We had a similar problem last year with falling prices,” said Carruth. “So in autumn we are going to go around the country and speak to other stakeholders and look at whether this is going to be a regular feature of the spring trade and, if so, what can be done about it.”

Some possible solutions, he said, included bringing animals to the marketplace either earlier or later, and working more closely with abattoirs. Farmers could also ensure they fulfilled their buyers’ specifications more closely. “Some buyers are very clear on the size and condition of the animal they require, so meeting those specifications would be helpful for producers,” added Carruth.

Speaking at the recent Scotland’s Beef Event 2015, organised by the Scottish Beef Association in Blairgowrie, NFU Scotland president Allan Bowie also expressed concern over the market. “Scotch Beef remains the cornerstone of agricultural production in Scotland,” he said. “However, for our beef finishers, spring 2014 and 2015 have been blighted by marketing difficulties and volatile prices. Add in challenging exchange rates and export pressure, and the pressures on our beef sector start to mount.

“There is nothing we can do to influence exchange rates, but we will continue to work with retailers, processors and public procurement to maximise their commitment to Scottish product. The forthcoming Highland Show will provide an excellent platform to meet supermarkets, and a meeting has been requested with officials to look at how we can get more Scottish produce on the menus at schools and hospitals.”

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