DURING a time of uncertainty in the industry following the Brexit decision, it’s ‘business as usual’ for the farmer for the next two years. 

That was the message at a briefing hosted by Quality Meat Scotland earlier this week, when the team outlined plans for the year ahead. 

“Access to overseas markets will not change, so the market will continue to be primarily driven by basic supply and demand, consumer confidence and exchange rates,” stated Stuart Ashworth, QMS head of economic services.

“It is, however, possible that there may be some implications for the timing of livestock sales as a result of producers being keen to maintain cashflows in light of changes to support payments.”

Scottish beef producers may have seen their Scotch premium slip in recent weeks, but Mr Ashworth was keen to point out that, over extended periods, it’s not unusual to see the premium tighten in the first few months of the year due to a reduced offering of Scottish cattle on the market place. 

He also warned of an influx of Irish cattle exports to Great Britain. 
“Dairy calf registrations reduced for both Great Britain and Scotland, meanwhile the number of beef calves, including those from the dairy herd, increased,” said Mr Ashworth. 

“There was a big increase in Irish calf registrations in 2015 and 2016, therefore we’ll see them come on to the market place during 2017. There was an extra 100,000 Irish cattle in the system, and we saw this during October, November, December and January with increased exports to Great Britain.”

Mr Ashworth also stated talk of food price inflation may influence consumer behaviour, but may offer some prospect of producer price stability if not firmness.

Speaking on the challenges facing the sheep industry, and Mr Ashworth said the export market has been particularly challenging, especially the French market. Despite the relative weakness of sterling, he said, we didn’t see a large growth of sheep exports to Europe. 

Highlighting the reduced supply from New Zealand, Mr Ashworth said the reduced New Zealand activity in the lead up to Easter has helped underpin where we are at the moment. There is, however, a volume of New Zealand lamb still to come, typically seen in April, May and June. 

Looking at Brexit, QMS chairman Jim McLaren said: “Key aspects are trade, farm support and access to labour, but we can’t control the geopolitical aspects around us.

“We know we are a small industry and, particularly in the sheep sector, rely heavily on exports, but the future of farm support needs to be informed by trade negotiations.

“Another issue is currency – the sterling is under pressure and where that finishes up is key, particularly to trade going forward,” added Mr McLaren. 

Outgoing chief executive, Uel Morton, said the organisation’s priority, in terms of budget spend, remained marketing the Scotch Beef, Scotch Lamb and Specially Selected Pork brands. 

The budgeted forecast spend for the coming year is £4.66m, a reduction from £5.02 in 2016/17. This is due to a reduction in grant income, which falls from £890,000 during 2016/17 to £407,000 for the year ahead. However, this figure only represents confirmed grants and with a number of applications in process it is expected to rise.

Mr Morton also pointed out projected levy income has reduced from the £3.97m received last year to £3.95m, and is forecast at the same value for the year ahead. He hopes to be able to announce significant progress on levy repatriation – money lost from Scottish stock being processed south of the Border. According to Mr Morton and Mr McLaren, they are still in discussion with AHDB and AHC with the value which varies between £0.75m and £1m, but are unable to share at this moment.