It is often the case that benchmark R4L deadweight price premium between the Scotland and England narrows or even reverses at this time of year.  This year that seasonal movement has occurred earlier than we would have expected.   It is also very unusual for the premium in the Scottish market to dissipate completely. 

A number of factors affect farmgate prices not least of which is supply of cattle. The importance of spring calving to the Scottish beef supply chain, 50% of Scottish born calves are registered in March, April and May  compared to just over one-third in England and Wales,  means that there is an increase in prime stock supplies at the turn of the year as cattle reach both slaughter age and slaughter weight.  The average age at which male cattle are slaughtered in Scotland remains around 21 months and 22 months for prime heifers.  England with its greater dependence on beef from the dairy herd has a slightly different profile and is slightly tighter supplied with prime cattle at the turn of the year.

Price reporting abattoirs in Northern England have for most of November and December killed fewer prime cattle than they did in 2020.  While a shortage of staff cannot be discounted as contributory factor the kill data would suggest that abattoirs in the North of England have found securing supplies difficult which would generally lead to an expectation of upward pressure on prices and a widening of the circle in which they would look for cattle and supports the view that England has had a tighter supply of cattle in the final quarter of 2021 than 2020. 

History would tell us that the Scottish price would move ahead of that in England and Wales towards the end of the first quarter and would peak in mid-summer as supplies of spring born calves of slaughter age head towards 28-30 months of age and Scottish supplies tighten.

There are though a number of additional challenges affecting the market this year that can aggravate the situation.  The meat processing sector, like a number of high profile sectors such as public transport and health services, are also being disrupted by staff shortages.  Labour shortages among processing businesses restricts the volume of cattle they can physically handle and consequently affects how many cattle they need.  We have also seen over the past twelve months how labour availability in all food processing businesses can affect the range of products on shelves or available to wholesalers.  

QMS will continue to work to drive demand for Scotch red meat and differentiate it in the marketplace.   In response to this seasonal narrowing of Scottish price premium and a number of other consumer drivers QMS has developed a year round programme of promotional activities for our brands which will start with TV and other media presence through January and in particular targeted social media activity aimed at the key 18-39 year old consumer group.

Covid rules permitting QMS also has a number of export market activities planned either independently or  in co-operation with Scottish Development International, Scotland Food and Drink and other agencies.