Red Meat Industry Profile 2016

The data has been collated from a number of sources and, unless otherwise stated, covers the 2015 calendar year. The report's objective is to provide users with a single source of key information on the shape and scale of Scotland's red meat industry. This is the eleventh edition of this publication, and it highlights the continued importance of the red meat sector to Scotland's economy.

2015 was a more difficult year for producers weather wise, as rainfall levels were high for most of the year and a cold summer led to slower animal growth rates. In terms of animal numbers, there was a small recovery in beef cows while the dairy herd expansion continued into a fourth year.

Reflecting an increased breeding herd, calf registrations rose. In the pig sector, breeding sow numbers surged, but the lack of abattoir capacity in Scotland meant that
more weaner pigs were sold across the border. In the sheep sector, there were fewer lambs born in 2015 and the breeding ewe flock is estimated to have consolidated slightly.

For beef producers, lower purchased feed costs and increased productivity are likely to have helped reduce pressure on their margins, and although the average farmgate price per kilo fell back, the average price of a carcase was little different due to heavier carcases. The timing of sales may well have been key for beef producers, with prices much stronger than in 2014 during the summer but down significantly for the remainder of the year.

For lamb producers, prices were significantly lower than in the previous year throughout most of 2015 and productivity is estimated to have edged lower on average, indicating a difficult year. In the pig sector, sharp declines in producer prices due to an EU-wide imbalance between supply and demand potentially offset the gains from cheaper feed costs and rising productivity.

The volume of red meat available for consumption in the UK during 2015 increased by 3.5% on 2014 and reached an 8-year high. There were increases across the board, mainly as a result of increased domestic production, due to higher productivity and increased carcase weights, but also through a decline in export volumes. However, despite the recovery in both the wider UK economy and continued consumer confidence, retail consumption of the prime cuts of beef, lamb and pork fell back, suggesting that the volume of red meat used by the food manufacturing and foodservice trades increased and/or there was a build-up of meat in cold stores.

Rising domestic production and a strong sterling led to a reduction in the UK's overall trade in red meat during 2015.

Imports fell by 3.5% from 2014 and exports contracted by 9.5%. On the beef side, imports slipped back as higher domestic production and weak export demand led to reduced import requirements. It was a similar case for sheepmeat. While imports of pigmeat also declined, there was some growth in exports.

In summary, 2015 was a difficult year for Scotland's livestock producers as farmgate prices spent significant periods at levels well below those of a year earlier, due to well supplied markets, exchange rate movements and competition in the retail sector. However, higher carcase weights and lower feed costs are – in many cases – likely to have limited the squeeze on margins. Cattle and pig producers also benefited from increased productivity in 2015, though the sheep sector found it harder on this front.

In the processing sector, Scotland's companies benefited from lower raw material prices, but found it difficult to compete in price-sensitive markets, and exporting profitably was a challenge. Despite the continued recovery of the British economy, changing lifestyle habits resulted in a fall in the consumption of prime cuts of red meat.