Red meat sector contributes £2.1 billion to Scottish economy

Red meat sector contributes £2.1 billion to Scottish economy

Quality Meat Scotland’s Scottish Red Meat Industry Profile report released today shows the sector makes a record-breaking £2.1 billion contribution to Scotland’s national economic output.

However, as QMS’s Stuart Ashworth, Head of Economic Services cautioned: “Tight supplies globally led to strong livestock prices during 2011 and this generated increased confidence in the cattle and sheep sectors. However, this confidence failed to materialise into greater stock numbers as producers took high prices as an incentive to cull their least productive breeding animals.”

“In the throes of a weak economy generally the processing sector struggled to pass on the increased cost of sourcing livestock. While strong demand for beef and pork facilitated an upwards movement in retail prices during the summer months, consumption fell back towards the end of the year as prices were perceived by many consumers to have reached prohibitive levels.
“For lamb this was true for much of the year as it had already become an expensive protein and so further price increases stifled consumption. Indeed lamb retail prices grew 21% year on year, having already been viewed expensive relative to other proteins,” said Mr Ashworth.
“While processors were shielded to some extent by strong overseas demand, helped by a weaker Sterling exchange rate fuelling the export trade, many felt increased pressure on margins, particularly as costs such as energy and distribution rose,” he added. He told Meat Management: “Processors primary cost is in getting the raw material into the abattoir and this has increased around 10%, some of which they have been able to pass onto customers, but by no means all of it.”

Overall Ashworth reflected that 2011 saw beef and sheep farmers end the year with more confidence about their future than for several years, pig producers and the processing sector were more cautious.

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