Optimism returns to the red meat sector

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The Scottish red meat sector looks to have come through recent scares around beef and the sluggish demand for lamb with an optimistic note being sounded yesterday by Quality Meat Scotland.

Their marketing guru, Stuart Ashworth, said there was evidence of a firm demand for both beef and lamb.

Cattle prices were now 7 per cent higher than they were a year ago and lamb slaughter volumes in January were 13 per cent higher than last year, an increase which he described as “beginning to make useful inroads into the increased carryover of hoggs into 2013”.

His summary of both beef and lamb markets was that the producer to processor market in both the UK and Ireland was giving a clear message of firm demand for both.

There was no single reason behind the upturn in the market with a number of factors contributing to the price improvement.

“From a UK perspective the dramatic weakening of Sterling from around 81p per euro at the start of the year to 87p at the time of writing has helped our exporters,” he said.

At the same time, he said a tightening of supply in many European markets was helping: “For example, French beef production fell 6 per cent in 2012 and is expected to fall a further 1.8 per cent in 2013.”

Other important markets like Germany and Italy were also expected to produce less beef in the first half of 2013 than 2012. As far as he was concerned, all of those created further opportunity for beef exporters from the UK and Ireland.

“Similarly French sheepmeat production fell 4 per cent in 2012 and is expected to fall a further 1 per cent in 2013,” he said.

“With the Spanish ewe flock also continuing to decline, export opportunities are likely to emerge,” he added, but he did qualify that comment saying it would only be the case provided the exchange rate remained 
favourable to the UK.

On the home market, Ashworth said the latest market information suggested there was a greater interest among consumers in buying prime cuts of beef.

Significantly, the volume of beef sold increased by 2 per cent in the past three months compared with one year earlier despite the retail price continuing to be 4-5 per cent higher than 12 months ago.

Retail sales of lamb had also increased significantly in the past quarter as the average retail price slipped below year earlier levels in response to the lower farmgate price.

Nevertheless, he concluded the current state of the retail and currency markets suggested that current prices for cattle and sheep were sustainable.