Quality Meat Scotland (QMS) has launched its latest Red Meat Industry Profile report highlighting the sector's contribution to food security and the rural economy.
Following the volatility of the past three years due to the Covid-19 pandemic, the UK's exit from the EU single market and the Ukraine war, producers and processors have faced a range of challenges amplified by cost-of-living pressures.
The 2023 report shows that production continued throughout this challenging period and highlights that turnover from red meat processing rose for a third consecutive year - generating an estimated £926 million of output for the Scottish economy.
Iain Macdonald, market intelligence manager at QMS and author of the report, said: “Turnover from red meat processing is estimated to have risen for a third consecutive year, lifting 5% to £926 million. Revenue generated from beef, offal, hides and skins are all estimated to have risen, partially offset by reduced revenue from lamb and pork sales.”
Among other things, the report found:
- Rising interest rates have pushed up the cost of borrowing for businesses in the red meat supply chain
- Feed costs spiked above pre-war levels
- Farmgate prices for finished stock rebounded through spring and reached record high levels between April and December
- Store cattle prices struggled to rise above levels set earlier in the year
- Market prices in the sheep sector fell back from records set in 2021
- Market supply was supported by a rebound in import volumes, but this trend started to reverse in the final quarter
- Employment in the primary processing sector reduced by around 4%, but the wage bill remained the same.
Supply chain challenges
Iain added: “A combination of rising input costs, attractive cull cow prices and uncertainty over future agricultural support led to a renewed contraction of Scotland’s beef breeding herd, with numbers down 3.3% year-on-year in December. Calf registrations did, however, prove more stable, with greater use of beef genetics in the dairy herd underpinning numbers.
“Meanwhile, continuing labour supply challenges in Scotland’s abattoir sector and firm demand from finishers based in England, where the suckler herd had contracted more sharply since 2018, resulted in an increased outflow of store cattle, limiting the number of prime cattle available to Scottish abattoirs.
“Outside of a positive Christmas trading period, consumer demand for lamb struggled given its position as an expensive protein and the pressure on household budgets from a rising cost of living.
“By the end of the year, a sharp contraction in breeding pig numbers had fed through to supplies, providing further support to market prices, while feed costs had begun to fall back. A tightening of supply in the EU also pushed up import prices, supporting the competitiveness of home-produced pork in the domestic and export markets.
“Livestock farming and processing is vital to our rural economy, so it’s positive to see that some input cost pressures are starting to ease back from the highs of 2022.
“What the latest Red Meat Industry Profile does highlight is the industry’s determination to continue producing high quality products while dealing with a wide range of supply chain challenges and economic and political uncertainty. In the first half of 2023, we have seen Scottish households continue to increase their spending on beef, lamb and pork - proving that Scots still have a strong appetite for red meat.”
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.
