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New red meat report shows sector’s £1bn+ value to economy and fundamental need for thriving export market

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 from Quality Meat Scotland (QMS).

The Red Meat Industry Profile provides a snapshot of the shape and scale of Scotland’s red meat sector in the calendar year of 2020. From producer to consumer, the report details the industry’s considerable contribution to Scotland’s economy as well as the significance of external markets to the country’s farmers and red meat processors.

In 2020, farm output from cattle, sheep and pig production totalled £1.29bn in 2020, 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. 

“Businesses across the supply chain have coped with ever-changing 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, all at a time when there was uncertainty as to whether a tariff-free trade deal would be in place in time for the year-end.

“Throughout, the red meat sector has worked through these challenges, not only continuing to operate but also creating market gains. This is vital as Scotland’s land and climate is ideal for sustainable red meat production.”

Multiple challenges were faced by the pig sector. After a strong start in early 2020, largely due to the shortage of meat in China caused by the severe outbreak of African Swine Fever (ASF), pressure mounted on pig producers and processors with a loss in trade with China, a backlog of pigs on farm combined with a rise in feed costs, processing sector outages and cheap imports pressurising prices. 

It 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.    

The report 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.

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. 

To read the report, please click here