“At least 15% of our pre-Covid normal sales outlets for beef has ‘vanished’ due to the closure of hotels and restaurants, with sales to other catering and event outlets also being closed off for the time being,” said Martin Morgan, executive manager of the Scottish Association of Meat Wholesalers (SAMW).
SAMW's executive manager Martin Morgan: "These are the stark realities for the entire Scottish red meat supply chain as the country embarks on another week of Covid-19 lockdown."“The reduction in demand for high value cuts, hides and fifth quarter material due to the Covid-19 impact is a worry for the entire supply chain. As a result, far from a making huge profits at present, as some have suggested, many processors are struggling to make any sort of a margin at all. Many of our members’ plants are now operating to a reduced schedule with one business manager reporting that he’s cut the weekly throughout of cattle by 30% since the Covid-19 lockdown began.“This turn of events is borne out by the market information published by Quality Meat Scotland and AHDB, alongside commercial reporting by organisations such as Kantar, all making it clear that prices across the retail sector are already under pressure.
“For example, AHDB’s latest beef tracker report shows the price of roasting joints sitting at £8.90/kg, for the week to April 18, compared to £9.45/kg at the end of March. The sector has at least recovered from the £7.17/kg low reached during the week to April 11th.“Even cuts that are in high demand such as standard mince and diced beef, which are boosted by home cooking demand, have declined in value by 5% since the end of March, with standard mince settling at £4.04/kg.“The harsh reality of today’s lopsided market is that most member companies’ cold stores are almost completely full with traditional high-value cuts that cannot find a buyer. While high demand for mince and roasting joints is clearly welcome, the collapse in demand for high end steaks is creating an extremely costly carcase imbalance.
“To account for lost sales of high value products, the retail price of mince would need to be increased sharply to return cattle values to pre-lockdown levels.
“These are the stark realities for the entire Scottish red meat supply chain as the country embarks on another week of Covid-19 lockdown."
This story was originally published on a previous version of the Meat Management website and so there may be some missing images and formatting issues.
