Scottish processors see 15% turnover uplift

Scottish processors saw total turnover increase by 15% year-on-year during 2010 to around £930m, boosted by a 40% revenue increase in exports.

The latest figures for the industry were revealed yesterday as part of Quality Meat Scotland’s (QMS) Scottish Red Meat Industry Profile 2011, which includes new figures following a survey of Scottish-based processors.

An additional 200 members of staff were taken on by Scottish processors over the course of 2010, taking the total number of people employed by the sector to 4,100, the QMS study also revealed.

Speaking at the launch of the Profile, which will be available free at the QMS stand at the Royal Highland Show, Stuart Ashworth, QMS head of economics services, emphasised that the processing sector was still finely balanced in terms of profitability.

He said: “While these figures seem be encouraging, what they don’t do is give us a clear indication of profitability. The challenge for processors is that increases in wholesale retail values have not been sufficient to offset higher raw material prices and the other increased costs, such as energy bills.”

And he emphasised the structure of the sector in Scotland meant not all abattoirs could capitalise on economies of scale.

“The five largest abattoirs operating in Scotland handle more than two-thirds of the slaughter of cattle, sheep and pigs, and throughput remains very important. Anything that challenges the volume of livestock available can tip the balance between profit and loss,” he added.

The combination of a 4% rise in the number of cattle slaughtered in Scottish abattoirs and higher average carcase weights meant that production volumes increased by 6.5% when compared with 2009. With the average value of sales also increasing, overall turnover rose by 12%.

Sheep throughputs at Scottish abattoirs fell by more than 2.5% during 2010, with harsh weather disrupting supplies during the first half of the year. With sheepmeat in short supply globally, processors were able to pass on some of the higher cost of sourcing product, with the end result a greater than one-third improvement in turnover.

Having fallen by 12% in the previous year, the total volume of pigmeat produced by Scottish abattoirs decreased by a further 3% in 2010 as the production sector continued to restructure. Nevertheless, revenues increased, as strong pigmeat demand facilitated higher prices in the wholesale and retail markets.

England and Wales remained the largest market for Scottish processors in 2010, with nearly two-thirds of all revenues being generated there.

For the second year the Scottish suckler herd expanded and was 2.5% larger than in 2009 at 534,000 head. However, the breeding ewe flock decreased by 1% and fell to 2.85m head. The sow herd rebounded sharply from a steady decline in recent years as it grew by 12% to 37,300 head.

As a consequence of higher production volumes at the UK level, annual average producer prices for cattle and pigs fell about 3% on the previous year.

However, farmgate lamb prices were boosted by tightening supplies and rose 9% above their 2009 average. In real terms the average price went up 4% on 2009.

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