15th April 2014

Chapter of “Change and Opportunity” for Scottish Red Meat Industry

The Scottish red meat industry has been undergoing a period of challenge and change but the signs are very positive for the industry’s long-term outlook, according to Quality Meat Scotland (QMS) Chairman, Jim McLaren.

Speaking at a media briefing on QMS’s planned activities for the year ahead, Mr McLaren observed that while change can be unsettling it also brings opportunity.

“The on-going debate about the future shape of the Common Agriculture Policy remains a source of uncertainty for those who work in our farming industry.“Our abattoir operators also continue to endure extremely tight margins and consolidation, leaving worryingly little capital for investment.  Notwithstanding the recent reduction in cattle prices, the fact is that current livestock prices and reduced livestock availability mean that operating margins for Scottish processors remain extremely low.

“It is vital that our processors have adequate supplies of livestock to achieve the critical mass our red meat supply chain needs to operate profitably and to ensure we are able to meet the continued increases in demand for quality red meat,” Mr McLaren said.

He said it was imperative that QMS continues to closely monitor, and respond to, consumer purchasing trends. The past 12 months have seen consumers continue to be careful about what they spend their money on and what they deem to be best value.

“Consumers in our target markets are looking for best value red meat to provide guarantees of the integrity and traceability of the products they buy – they expect it to have been reared to a high standard of welfare and to be produced in a natural Scottish environment,” said Mr McLaren.

Mr McLaren said he was pleased to be welcoming four new QMS board members who take their places on the board this month. Prof Phil Thomas, Robert Parker, Andrew Peddie and Gordon McKen all step down and hand over the reins to Prof Julie Fitzpatrick, Sarah Mackie, Philip Sleigh and George Milne.

“The diversity of the QMS board is one of its key strengths and I look forward to the contributions these new individuals will bring to our industry.

“Another important change for QMS followed a review of the work of the QMS Industry Development team which is now sharply focused on grassroots activity to assist the industry to maximise efficiency and profitability.

“Helping our industry reach a point where there is sufficient profitability in livestock rearing to reverse the prolonged decline in livestock numbers, remains a key priority.”

Mr McLaren said examples of grassroot activities – such as the Planning for Profit, Resilience and Monitor Farm initiatives – were delivering strongly for the industry.

“We have a number of other excellent projects in the pipeline to be launched in the coming months. Key to the success of these activities is the willingness of farmers to share with others how they manage their businesses and we are very grateful to all of those who give up their time to do so.

The renewed focus within the future Scottish Rural Development Programme on knowledge transfer and innovation is, said Mr McLaren, in line with QMS’s focus on practical projects to improve efficiency and bottom line.

’Uel Morton, QMS Chief Executive, said the organisation was in good shape to deliver strongly on behalf of levy-payers.

Mr Morton said he was pleased to note that grant income sourced by the organisation for the year ahead is £1.3m.

However, he warned that income from levy was being eroded by a combination of falling livestock numbers and sheep and pigs being slaughtered south of the border, saying QMS would continue to press the case for the return of this lost levy, amounting to around £1.6 million each year.

Looking in more detail at the organisation’s finances, he said: “Our proposed external spend for the 2014/15 year is £5.6m and this compares with an external spend of £5.8m for 2013/14. 

“Putting these figures in context, it is worth remembering that the external spend figure has been fairly consistent having increased from £4.9m in 2009/2010 to £5.8m in 2010/2011, when levy rates last increased, to £6m in 2011/2012 and £5.9m for 2012/2013.

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