While figures published yesterday confirmed that 2015 was a difficult year for Scotland’s livestock farmers – with farmgate prices generally standing at levels well back on the year – a continuation of the current “challenging circumstances” is likely to see them face another tough year in 2016.
Releasing the Scottish Red Meat Industry Profile, a report on the whole production chain from producers to consumer that is published annually by Quality Meat Scotland (QMS), the organisation’s chief economist, Stuart Ashworth, warned that there were no real signs that market prices were going to offer the lifeline needed by the industry.
Expressing a hope that farmgate prices had reached their nadir, he said that marginal improvements in production efficiency – and hitting the spec wanted by buyers – were likely to be the way forward for producers during the course of the year.
In the beef sector Ashworth said lower feed prices had helped finishers last year – but warned the practice adopted by many in 2015 of maintaining margins by keeping cattle on to higher carcase weights wouldn’t wash this year.
And he advised cattle finishers to aim for a lighter carcase now at the beginning of the finishing process, rather than either continuing as normal – or trying to make sudden changes towards the end of the finishing period.
He said: “The fact that heavier carcase weights will be penalised this season has been flagged up early enough to allow them to adapt their management regimes.”
On the sheepmeat front he said that while export to France and other European countries was a considerable share of the market, he said that the outcome of this week’s referendum would be felt most through its effect on exchange rates.
“While other political and trading factors might come into play later on, in the short term the influence the vote has on exchange rates is likely to have the biggest impact on sheep prices.”
Turning to the pigmeat sector, he said that the problems stemming from the Russian import ban that had hit the whole European market were still taking their toll, but added that there had been some signs of increased demand from China.