SAMW head predicts positive future for Scottish meat

A “great future” for the Scottish meat industry was predicted at the weekend by Scottish Association of Meat Wholesalers (SAMW) president Alan McNaughton.

In his opening speech at SAMW’s annual conference, entitled ‘Building for the Future’, McNaughton praised the industry’s qualities. He explained that the Scottish meat industry had a “great product” to offer and, in light of the horsemeat scandal, was one that had “once again proved itself to be an honest, reliable and trustworthy” industry.

He highlighted that such qualities had been “called into question” elsewhere in Europe since the horsemeat scandal, which was caused by the “criminal activities of a few individuals”, he said.

However, McNaughton highlighted possible threats to the country’s meat sector, which sat beyond the horsemeat issue. He said that, for all of the positives on which the industry had been built in the past “and all the promise which lies ahead”, the industry’s future was being exposed to substantial risks.

According to the president, risk for the Scottish meat industry lay within several areas, including a “serious and persistent” lack of livestock supplies; a “flawed” UK government stance on CAP reforms, an unsustainable surge in raw material costs, and fragile consumer spending.

He also highlighted misguided livestock movement restrictions and excessive bureaucracy – in terms of certification – as minor, but important issues.

Declining livestock

Some of these risks have been developing for several years and McNaughton said declining cattle and sheep numbers had been a problem for eight years, even before CAP was last reformed. He added: “Market forces will correct any imbalance between supply and demand, we’ve been told, with no need for a return to coupled subsidy payments.

“Well, it hasn’t worked, certainly not so far, despite the fact that those same eight years have included three spells of rapid price inflation, which have lifted cattle prices from £1.80/kg in 2004 to £4/kg today.”

Although on-farm costs have risen in the last eight years, he said the current level of livestock prices was putting a squeeze on processing margins. “We are now seeing record farmgate prices for cattle, following yet another shortage-driven price burst,” he said.

A combination of high cattle prices putting a squeeze on processing margins has led the industry to raise “serious questions” about the ability of consumers to keep increasing their spending on food and higher priced proteins. He said: “So far, consumers have not been asked to pay the full price increases needed to support today’s ex-farm price.”