Red sector meat a crucial part of Scottish economy

Although numbers of cattle and sheep in Scotland have declined since the subsidy link with numbers was broken, the livestock and processing sector still generated revenues of £1.8 billion in 2010 - an 8 per cent increase on the previous 12 months which means red meat takes a 0.7 per cent share of the wider Scottish economy.

Processors saw total turnover increase by 15 per cent to 930 million during the period, but Stuart Ashworth, economic guru with Quality Meat Scotland, who produced the statistics, emphasised that the processing sector was still finely balanced in terms of profitability.

"While these figures seem to be encouraging," he said, "what they don't do is give us a clear indication of profitability. The challenge for processors is that increases in wholesale retail values have not offset higher raw material prices and other increased costs such as energy bills."

Cattle slaughterings jumped 4 per cent and, combined with heavier carcase weights, the total volume of beef going through abattoirs rose 6.5 per cent. A larger percentage of the total production went abroad, with a 25 per cent increase in the tonnage exported.

On farm, Scotland's beef breeding herd rose for the second successive year with the 2010 increase adding 14,000 head or 2.5 per cent to make a total of 534,000 cows.

Ashworth predicted that beef producers would be less likely to be tempted to run cattle to big weights than last year, against a backdrop of high grain and straw prices.

Having fallen by 12 per cent in the previous year, the total volume of pigmeat produced by Scottish abattoirs decreased by a further 3 per cent in 2010 as the production sector continued to restructure. Nevertheless, revenues increased as strong pigmeat demand led to higher prices in the wholesale and retail markets.

Ashworth said these statistics showed how important it was that future agricultural policies being created in Europe should reflect on the importance of the red meat sector to the Scottish economy.

He also expressed a personal frustration that food prices were often put into the guilty box when rises in the Retail Price Index were highlighted in the news.

"Food is not a big driver and recent figures show red meat does not make a major contribution to RPI increases," he stated, adding that while the RPI has risen 2.7 per cent between January and May this year, the price of beef in shop shelves had been static.

Looking at the export market, he admitted that much of it was based on favourable currency exchange rates, but he believed these would continue for the foreseeable future as the euro continued to face major difficulties.