The benefit of Scotland’s red meat sector to the country’s economy and the importance of external markets to its success are highlighted in a new report.
The Red Meat Industry Profile, written by Quality Meat Scotland (QMS), provides a snapshot of the shape and scale of the red meat sector in the calendar year of 2020.
From producer to consumer, it details the industry’s contribution to Scotland’s economy as well as the significance of external markets to farmers and red meat processors.
In 2020, farm output from cattle, sheep and pig production totalled £1.29bn, up 2% from £1.26bn in 2019, and accounted for 37% of Scotland’s agricultural output. The beef sector alone accounted for 24%.
Primary red meat processing, which has some of the highest economic multipliers for output and employment across the country’s industrial sectors, generated £815m of revenue and paid over £77m in salaries.
The report emphasises the value of trade outside Scotland with two-thirds of revenue generated from export markets in the rest of the UK and beyond, as well as the vital need of access to skilled labour from the EU, which accounts for 47% of the processors’ workforce.
Iain Macdonald, senior economics analyst at QMS and author of the report, said that the industry had made impressive gains despite a particularly challenging year.
“While every year the red meat sector sees some level of volatility, 2020 was unprecedented and the sector has proven to be a stalwart of our economy.
"Not only was there the coronavirus pandemic, but the supply chain had to plan for the significant disruption caused by the UK exiting the EU single market."
Mr Macdonald said businesses across the supply chain had coped with public health restrictions and the knock-on impact on sales channels, temporary site closures and the subsequent backlog of livestock to process.
Meanwhile, the UK’s looming exit from the EU single market demanded that new trade conditions, product labelling and potential demand shifts had to be planned for.
“Throughout, the red meat sector has worked through these challenges, not only continuing to operate but also creating market gains," he added. "This is vital as Scotland’s land and climate is ideal for sustainable red meat production.”
Multiple challenges were faced by the pig sector, following a strong start in early 2020 largely due to the shortage of meat in China caused by African swine fever (ASF).
During the pandemic, pressure mounted on producers and processors with a loss in trade with China. There was also a backlog of pigs on-farm combined with a rise in feed costs, processing sector outages and cheap imports pressurising prices.
The report shows a more positive 12 months for the beef and lamb sectors despite a challenging export market.
Record-breaking livestock prices and a greater share of domestic demand were seen as at-home cooking increased and cheaper imports generated by the largely closed food service declined, compensating for the loss of some high value exports.
This was particularly welcome in the cattle sector, where in the second half of 2019 and first third of 2020, farmgate prices had slumped well below historic averages.
However, Scotland’s beef herd continued to contract in 2020, leading to worries for the processing sector which operates on thin margins, but there is some evidence of this decline slowing in the second half of the year.
Quality Meat Scotland's report also illustrates the importance of markets in the rest of the UK and the EU to the Scottish sheep sector.
With Scottish consumption of lamb per person around half of the UK average, Scottish abattoir production is estimated at 2.2 times (220%) local consumption, while on-farm production is estimated at over five times (536%) of that consumed by Scots.
