Scottish producers see lower costs offset by falling prices in red meat sector

Scottish livestock producers benefited from lower input costs, increased productivity and better weather conditions in 2014. 

According to the QMS Scottish Red Meat Industry Profile, mortality lowered and productivity increased over the year.

“Calf registrations increased, despite a further decline in the beef breeding herd, while the number of lambs per ewe rose sharply,” said Stuart Ashworth, QMS head of economics services. “In the pig sector, lower feed costs and the higher producer prices of 2013 meant that producer confidence began 2014 at its highest level for a number of years. During the year there was a further expansion in the sow herd and previous investments in genetics and herd health supported increased sow productivity.”

Despite the better grass growth, lower purchased feed costs and increased productivity, which helped reduce pressure on beef producers’ margins, there was a significant decrease in farm gate prices during the year.

“Though lamb producers are likely to have benefited from an increased lamb crop, the timing of sales will have been a key factor in determining profitability, added Ashworth. “Indeed, while the annual average auction price averaged slightly higher than in 2013, there was considerable variability during the year.”

The report also showed that, in the UK overall, the volume of red meat available for consumption during 2014 increased by 3% on the previous year. There were increases across the board, mainly as a result of increased domestic production due to higher productivity and increased carcase weights. However, retail consumption of the prime cuts of beef, lamb and pork fell back. Ashworth attributed this trend to the growing volume of red meat used by the food manufacturing and foodservice trades and also a potential build-up of meat in cold stores.

The UK’s overall trade in red meat increased during 2013, with imports rising by 2% and exports by 3.5%. On the beef side, imports grew strongly as the Irish Republic, saw a considerable increase in production. On the export side, increased production and imports made an increased volume of beef available for sale overseas.

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