Farming: Bank pledges its future to ‘positive’ Scottish farming

A COMMITMENT to continued financial support for farming was given yesterday by the Clydesdale Bank.

Speaking at the Spectacular show and sale of beef cattle at Thainstone Centre, Inverurie, sponsored by the bank, agribusiness development managing partner Iain Clark said most farm businesses were strong enough financially to withstand pressures caused by the prolonged period of wet weather this summer.

“This year’s poor weather is having a major impact on both output and costs,” said Clark. “But the fundamentals of the industry remain sound with the future outlook and market prices still in a positive state for most products.

“Many producers started the year with improved profits and a strong balance sheet and farming remains a favoured sector for capital allocation. That won’t change as a result of one difficult season.”

Clark admitted that higher feed costs this winter would hit the livestock sector, particularly the intensive pig and poultry sectors where feed accounts for a high proportion of total costs.

But continued high prices for cattle would lessen the impact on beef producers although the reality in the short-term was likely to be lower margins than in a “normal” weather year.

“Supply and demand is still in favour of beef producers which suggests they can expect to continue to receive strong prices,” he said. “There’s obviously something of a balancing act on this issue if the whole Scottish meat chain is to fulfil its potential.”

The premium Scotch Beef brand continued to pay dividends and was now the largest food and drink brand in the UK, worth £247 million. “The fact that Scotland could produce and export even more premium brand product remains an enticing prospect,” he added.

A more pessimistic view was taken by Pat Machray, chief executive of ANM Group, auctioneers for the Spectacular, who suggested weather and other factors were in danger of brewing up a “perfect storm” for the industry. He said: “The challenge for the industry as a whole is to avoid this happening.”

Recent sales had confirmed a widening gap between the values of good quality and poorer quality cattle. The show and sale of 100 high quality cattle in the Spectacular – many of them summer show champions – had highlighted the fantastic quality of cattle produced in Scotland. “The focus has to be on continuing to produce quality, despite any challenges which might be thrown up,” Machray said.