Scottish red meat abattoirs suffer in 2013

Scottish meat processors took a financial hit from falling red meat consumption and shrinking livestock supplies in 2013.

Turnover at Scottish abattoirs fell 10% to £870m and employment fell by a third to 2,700, according to Quality Meat Scotland (QMS).

That includes 1,700 jobs lost when the Hall’s of Broxburn plant in West Lothian was shut down by its Dutch owner, Vion.

The levy board’s annual industry profile showed UK red meat consumption fell for the sixth year running, but retail price rises for beef and pork helped offset the lower volumes.

Tight supplies propped up farmgate prices, with the Scottish breeding sheep flock declining 2% and the beef herd down 0.7%, though the Scottish sow herd grew slightly.

See also: Finished cattle slump puts pressure on store prices in 2014

QMS head of economics services Stuart Ashworth said profit margins would have been thin for processors.

“Looking forward in terms of supply it is not going to get any easier for the abattoir,” he said.

“Farmers will see some recovery in the marketplace because of the almost inevitable tightening of supply.

“Probably over the past six months there has been some rebalancing of the margin within the supply chain.

“If I am picking a challenge for our industry it is that throughout the red meat chain there [should be] significant margin to allow businesses, whether they be farmers or processors, to operate on a sound financial footing.”

“If I am picking a challenge for our industry it is that throughout the red meat chain there [should be] significant margin to allow businesses, whether they be farmers or processors, to operate on a sound financial footing.”
Stuart Ashworth, QMS head of economics services

The QMS report showed UK beef consumption fell 2% for the second year running to hit its lowest level in a decade, while total pigmeat purchases fell by 1.5% to a 13-year low.

Lamb consumption grew 6% but remained below 2008 levels.

Mr Ashworth said beef farmers hit by falling prices could be helped by a quick demand boost over the summer.

“We could now do with an extended period of nice sunny weather the barbecues come out and we get a general feel-good among consumers,” he said.

In 2013, the 24 licensed red meat abattoirs in Scotland processed 2.135 million animals – 12% fewer than the year before.

But Scotland remained a net exporter of beef and lamb, with England and Wales the biggest outside market, generating more than two-thirds of revenues.

Further afield, France took just under half of the £74m of Scottish red meat sold outside the UK.

Belgium, Netherlands and Luxembourg bought a quarter between them, while Eastern Europe grew as a market for lower quality and fifth quarter products.