Not all doom and gloom in the red meat supply chain
Despite one end of the market being overhung by the forage, feed and bedding shortages of 2018 and the other with the continuing uncertainties of Brexit, there are still signs of sustained investment in different parts of Scotland’s red meat supply chain.
That was one of the more upbeat findings of Scotland’s annual Red Meat Industry Profile which was launched yesterday by Quality Meat Scotland (QMS).
Despite a squeeze on producer returns – with higher costs and more troughs than peaks in prices – QMS chief economist, Stuart Ashworth said that while many uncertainties remained, the continued investment in businesses highlighted the long-term nature of both the farming and processing sectors:
“Despite the number of unknowns there are welcome signals that the industry is committed to weathering the storm and investing for the future,” said Ashworth.
He said that the sector required a long-term stance to be taken: “We can take encouragement in the commitment to the future being shown by businesses operating throughout the production chain,” he said.
Stating that the situation marked a balance between short term challenges and long term vision, he added that improved efficiencies – in terms of both labour requirements and sustainability criteria – were also instrumental in influencing investment decisions.
He admitted that while Brexit remained a Rumsfeldian “known unknown”, a UK exit in October – in the middle of the lamb export season – was likely to be a bigger threat to that sector than at the end of March, when the trade was winding down.
However, he believed that while the recognition of “third country status” granted for lamb earlier in the year - which allows sales to continue to Europe – had now lapsed, regaining such accreditation was likely to be a matter of resubmitting the same evidence again.
Looking to the future Ashworth was optimistic about beef prices – with the supply likely to be reduced due to lower calf registrations both in Scotland and Ireland: “And the extra beef on the market as a result of the contingency measures taken by retailers for a March Brexit - which had seen a considerable amount of additional frozen beef purchased - will soon have been offloaded, further reducing the glut of supply which has been dragging the market.”
Looking at trends in the beef breeding sector, he said 2018 saw a continued move away from continental sires, towards native breeds. And although the Limousin breed retained its position as the most popular sire in Scotland, its share had fallen by 5.6 per cent, while there were also heavy declines for the Charolais and Simmental breeds, which saw registrations fall by 8.4 per cent and 5.9 per cent respectively. In contrast, said Ashworth, Aberdeen Angus registrations rose by 2.5 per cent.