Red meat supply chain under pressure from Christmas demand
According to the latest market commentary from Quality Meat Scotland (QMS), the seasonal supply of livestock is expected to increase in the last quarter, but current labor shortages remain a concern.
Iain Macdonald, senior economist analyst at QMS, said labor shortages at processing companies are “of particular concern” given that the seasonal supply of livestock typically increases in the last quarter of the year to meet to the increased demand for red meat during the winter. McDonald added that there are also concerns about the shortage of drivers to transport livestock and meat across the country.
QMS said Scottish auction market data over the past five years shows an increase of around 10% in sales of prime lambs between September and the three-week peak before Christmas in Scotland, and around 20% in England and Wales.
According to the same data, in Scottish slaughterhouses, slaughterings of premium cattle were on average around 10% higher at their three-week pre-Christmas peak than in September over the past five years. QMS reported that the peak for cattle tends to start earlier than for lambs, closer to mid-November due to the longer maturation period.
“Pressure on the price of livestock”
Macdonald noted that a backlog of cattle ready for slaughter has a ripple effect. He said: “As we saw in the United States during the pandemic and in the pig sector in Britain, a surplus of livestock beyond the operational capacity of the processing sector can lead to a backlog of animals ready for slaughter on the farm, putting pressure on the price paid for them, regardless of the level of consumer demand.
In addition to labor, QMS said components and parts are a concern in the processing industry as well, with pent-up demand and backlogs at ports around the world leading to rising costs of goods and costs. raw materials. These pressures were compounded in September by a decline in the pound sterling against the US dollar.
While pork prices are now down sharply, the increase in carcass weights has at least kept the overall carcass value 8% above the five-year average, while prices per kilo have remained slightly above their five-year average.
McDonald added, “One part of the industry where pricing pressure has been limited so far is retail. Kantar’s latest data for 12 weeks through early September shows fresh beef and pork on average 1-2% cheaper than a year earlier across Britain, although lamb is on average 4% more expensive.