Despite the many challenges which faced the Scottish red meat industry during 2013, the revenue generated by livestock farming and processing still managed to top £2 billion during the year, according to a publication launched today (June 16th) by Quality Meat Scotland (QMS).
Speaking ahead of this week’s Royal Highland Show, at the launch of the Scottish Red Meat Industry Profile 2014, Iain Macdonald, QMS Economics Analyst, said producers had understandably started the 2013 year on a low ebb after an exceptionally wet 2012.
The harsh weather through to early May in 2013 led to a difficult spring calving and lambing with mortality high. However, feed costs began to decline sharply in the spring of 2013, leaving pig producers feeling much more optimistic.
“The Scottish suckler herd decreased in size for the third year running in 2013, having reduced by 0.7% from 2012 at 428,500 head,” said Mr Macdonald. “Following an increase in 2012, the ewe flock contracted in 2013, with numbers falling two per cent year-on-year to 2.88m head. It was a better year for pig producers with some herd rebuilding and sow numbers rising by nearly 1.5% to 28,500 head.”
A tightly supplied market pushed up prime cattle producers’ prices to record levels during the summer of 2013. However, observed Mr Macdonald, prices cooled towards the end of the year as supplies picked up and higher retailer prices subdued demand.
“After a slow start to the year, farm gate lamb prices picked up significantly in the spring and spent most of the rest of the year above 2012 levels. Pig prices traded 6 – 12 per cent ahead of year-earlier levels,” said Mr Macdonald.
The 2014 Profile includes the results of a survey of Scottish processors. This revealed that in 2013 processors’ total revenue was estimated to be down by 10% to £870m as higher wholesale prices only partially offset 12% decline in livestock throughput.
“Among those export markets which showed growth in 2013 were Eastern Europe and Africa, which offered opportunities to balance the carcase, while Switzerland and Hong Kong provided growing markets for premium product,” said Mr Macdonald.
“Fifth-quarter product sales also help carcase balance and made up around 10% of total sales and 20% of exports,” he added.
Looking forward, Stuart Ashworth, QMS Head of Economics Services, said in the short-term the beef market looks likely to remain well-supplied due to higher carcase weights offsetting any potential decline in slaughter numbers caused by the fall in calf registrations in Scotland in 2012.
“In addition the overall UK supplies are likely to be boosted by the higher number of calves registered in early 2012 in England and Wales reaching the market currently, coupled with upwards pressure on imports due to high production in Ireland in particular,” said Mr Ashworth.
“A strong pound is likely to continue to place downwards pressure on exports, however in the autumn the market may begin to tighten up. In the December census, the number of cattle under 12 months of age in both the UK and Ireland fell back significantly year-on-year. Furthermore, BCMS data for April showed a 7% fall in cattle aged 12-18 months living on GB farms.
“Additionally, with the beef price falling significantly in the first half of this year, processors are likely to have seen the pressure on their margins ease. If the lower raw material prices are passed on at the wholesale and retail level then demand may begin to strengthen.”
Looking at the sheep sector, Mr Ashworth said there had been a fast start to the new season with lambs reaching the market much more quickly than last year but prices have remained firm nonetheless.
“This year’s lamb crop was helped by the much better weather at tupping last year and then at lambing in the spring. A four per cent increase in the UK breeding ewe flock in the December census suggests that the market will remain well supplied with home-killed lambs throughout the year.
“In terms of imports later in the year, a similar New Zealand lamb crop to last year, along with a rebalancing of sales to China, is likely to continue to reduce pressure on imports to the UK.”
However, Mr Ashworth observed that a strong pound is likely to reduce the competitiveness of the UK export trade and consumption in the key French market this year is being hit by the economic stagnation.
“If higher domestic production balances out against trade flows then it seems likely that retail prices will steady, helping support consumption.”
Looking at the outlook for the pig sector Mr Ashworth said that a steady increase in productivity is likely to result in continued slight growth in UK pigmeat production.
The Scottish Red Meat Industry Profile 2014 is available to download from www.qmscotland.co.uk and copies can be collected free of charge from the QMS stand at the Royal Highland Show or ordered by calling 0131 472 4040.