Red meat sector adds £1billion to Scottish economy

Making a £1 billion-plus contribution to Scotland’s economy, the red meat sector stands as one of the country’s leading economic generators – and that role continued over the recent Covid pandemic.
Iain Macdonald, senior economics analyst at QMSIain Macdonald, senior economics analyst at QMS
Iain Macdonald, senior economics analyst at QMS

Figures released in a report drawn up by Quality Meat Scotland (QMS) showed that in 2020, farm output from cattle, sheep and pig production totalled £1.29bn, up two per cent from £1.26bn in 2019, and accounted for 37 per cent of Scotland’s agricultural output.

The annual report, The Red Meat Industry Profile, flagged up the shape and scale of Scotland’s red meat sector in the calendar year of 2020, detailing the industry’s contribution to Scotland’s economy as well as highlighting the continued significance of external markets to the sector.

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The report also highlighted that primary red meat processing had some of the highest economic multipliers for output and employment across the country’s industrial sectors, generating £815m of revenue and paid over £77m in salaries.

The value of trade outside Scotland was also highlighted - with two-thirds of revenue generated from export markets in the rest of the UK and beyond, as well as the vital need of access to skilled labour from the EU, which accounts for 47 per cent of the processors’ workforce.

Iain Macdonald, senior economics analyst at QMS and author of the report, said that the industry had made impressive gains overt he past 12 months, despite a particularly challenging year.

“While every year the red meat sector sees some level of volatility, 2020 was unprecedented and the sector has proven to be a stalwart of our economy. Not only was there the coronavirus pandemic, but the supply chain had to plan for the significant disruption caused by the UK exiting the EU single market.

“Businesses across the supply chain have coped with ever-changing public health restrictions and the knock-on impact on sales channels, temporary site closures and the subsequent backlog of livestock to process,” said Macdonald.

“Meanwhile, the UK’s looming exit from the EU single market demanded that new trade conditions, product labelling and potential demand shifts had to be planned for, all at a time when there was uncertainty as to whether a tariff-free trade deal would be in place in time for the year-end.

And he said that the red meat sector had worked through these challenges, continuing to operate and creating market gains.

“This is vital as Scotland’s land and climate is ideal for sustainable red meat production.”

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But the report also highlighted the multiple challenges faced by the pig sector with the loss of the China market and a backlog of pigs on farm combined with a rise in feed costs, processing sector outages and cheap imports pressurising prices.

Despite a challenging export market, the beef and lamb sectors had fared better. “Record-breaking livestock prices and a greater share of domestic demand were seen as at-home cooking increased and cheaper imports generated by the largely closed food service declined, compensating for the loss of some high value exports,” said the report.

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