The latest Red Meat Profile from Quality Meat Scotland shows a situation best summarised as “challenging.”
The 64-page document provides every fact and statistic imaginable about an industry which has a turnover of £2 billion and employs 26,000 people or 1% of the national workforce.
It is a success in these terms but behind the headline figures producers and processors are having to jostle to gain elusive margins.
QMS economics analyst Iain Macdonald said producers had started last year on a low ebb after an exceptionally wet 2012.
This had led to a difficult spring calving and lambing with mortality high.
However, feed costs began to decline sharply in the spring, 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 2% 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 last year.
However, 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% to 12% 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 a 12% decline in livestock throughput.
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.
“A strong pound is likely to continue to place downwards pressure on exports.
“However, in the autumn the market may begin to tighten up,” he said.
Additionally, with the beef price falling significantly in the first half of this year, processors are likely to have seen pressure on their margins ease.”
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,” he said.
“A 4% increase in the UK breeding ewe flock in the December census suggests the market will remain well supplied with home-killed lambs throughout the year.”
Looking at the outlook for the pig sector, Mr Ashworth said 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 by calling 0131 472 4040.