A recent survey by Scotland’s red meat promotional body, Quality Meat Scotland, has indicated a welcome surge in confidence among Scottish beef producers and that was certainly evident among producers attending this week’s Aberdeen Christmas Classic at Thainstone Centre.
The ringside for the judging of the beef cattle classes in the show, and the subsequent sale, was packed with beef producers, many of whom had been denied the opportunity of attending last year because of the first of the winter snowstorms.
The number of cattle competing in the show was, however, down – although young farmers are to be commended on the turn-out in their section – and much of the talk centred round the future of the industry.
With beef cattle prices at record levels over the past year, it is little wonder that 35% of suckler herd owners surveyed said they were more confident about their future while the number expressing less confidence fell from 31% in the last survey in 2008 to only 7%.
Not surprisingly, the main concern “by a large margin” was the future of the Single Farm Payment and its impact on farm businesses, followed by the challenge created by input price inflation.
The relentless decline in the national beef suckler herd is a matter of real concern and while there are some signs that the herd has stabilised, the Cabinet Secretary for Rural Affairs, Richard Lochhead, highlighted the importance of maintaining the breeding herd to fully exploit the potential for Scotch beef in world markets.
Officially opening Scotch Premier Meat’s Christmas carcase show, Mr Lochhead assured producers that the Scottish Government would do everything in its power to maintain support for livestock production in negotiations with the European Union on reform of the Common Agricultural Policy.
Livestock production, he pointed out, represented 38% of Scottish farm output and accounted for 27,000 jobs. The meat processing sector added £200 million to the value of farmers’ livestock production and beef exports were now back up to more than £100 million a year.
“The processing sector faces a real challenge in sourcing raw material,” he acknowledged. “Beef farmers are rightly taking advantage of current high prices to sell stock but I would urge them to look to the longer term and maintain breeding stock numbers.”
The first priority in CAP reforms, he said, had to be food security and this meant encouragement for food production. The government would do everything possible in negotiations to maintain support for livestock production, including direct headage payments.
Mr Lochhead was commenting on concerns expressed by Alan Craig, chief executive of Scotch Premier’s parent company, the farmer-owned ANM Group Ltd, who said he was “seriously concerned” about he perceives as a continuing decline in the beef breeding herd following a 28% increase in the marketing of cull cows through the group’s marts.
“Finished cattle prices are £200 a head higher than a year ago but this is not being reflected in the price of beef because of consumer resistance,” said Mr Craig. “Our meat division is suffering significantly and our figures are still in red ink. It has not been a positive year but we hope pre-Christmas trading through December will help.”
Mr Craig revealed a bold new initiative by Scotch Premier to protect its position at the quality end of the market with the launch of a new Select range of beef bred, reared and slaughtered in Scotland.
New incentives are being offered to attract the best local cattle to the company’s Inverurie plant and handling charges – a bone of contention with many producers – are being reduced.
Mr Craig has been attempting over the past two years to get the company back in the black by increasing throughput to spread overhead costs. Producers have been concerned that importing finished cattle from England and widening the range of cattle handled is devaluing the Scotch Premier brand. The new Select brand is designed to address these concerns.
SPM say the brand will deliver the “best of the best” beef, hand picked to customers’ requirements, with far higher trim specifications along with narrower weight and grade bands. The cattle used will all be Scottish born, bred and slaughtered, using only the best steers and heifers from recognised beef breeds.
“Quite simply, this new range raises the bar and offers customers an even more outstanding level of quality and consistency,” said general manager, Malcolm Hetherington.
Simultaneous changes to the Scotch Premier procurement policy are aimed at attracting more local cattle, particularly from Aberdeenshire, across the whole calendar year.
The maximum threshold weight for cattle before penalty deductions are levied has been raised from 420kg to 450kg and the threshold for bulls from 400kg to 420kg.
The current 2% handling charge has now been capped at £19.50 per animal and deductions for statutory levies, classification, insurance and inspection reduced from £7.73 per animal to £6.50. This means producers will now pay total charges of £26 per animal compared to an average charge of £32.23 previously.
These new charges, which have already been implemented, will put SPM in a more competitive position and means beef producers will benefit from intense competition between local abattoirs to secure quality cattle in the run-up to Christmas. What happens after the New Year will be a totally different matter.