Producers attending a beef industry meeting near Huntly shared their fears that they’re gambling on making the right decisions for the future without any clear guidance from the Scottish Government.
Leslie Wylie, SAC Consulting’s beef specialist based in Forfar, said farmers are faced with rising input costs which are affecting the profitability of the sector, but they’re getting no clear message about how to prepare for future policy.
Speaking after an industry meeting at Cairnborrow Farm, she said: “That’s a real challenge when you’re looking at your business and you don’t know which way the government will or won’t support you.
“Making changes in those circumstances is a big gamble and many farmers are at a loss to know how to move forward.”
In her address to farmers, she outlined the opportunities to look at systems that could
make producers less vulnerable to future price fluctuations.
“When we talk about being more resilient and looking at systems that aren’t so reliant on inputs, that’s a big change away from the high-input, high-output beef production systems we have in the north-east. It’s a lot for farmers to get their heads round,” she said.
“The farmers at Cairnborrow are getting a really high price for their calves but then we started to look at how much it’s costing them to keep a cow for a year. Before the input rises they were making a profit, but the challenge for a suckler herd are the cows that don’t produce a sellable calf.
“They cost you money and eat away at the profit the other cows have left you, so it’s about minimising those empty and unproductive cows.”
She also pointed out that if cow numbers continue to drop – as they’ve
been doing since 2018 – there won’t be enough critical mass to keep all Scotland’s beef processors in business.
However, she was optimistic about the high global demand for beef at a time when supply is extremely tight.
“Australia’s equivalent beef price is £6.40/kg compared to our £4.40 –£4.50, the Irish price is sitting above the UK price, and the mainland Europe beef price is about the same as the UK price, so there is no cheaper alternative source of beef,” she said.
SRUC’s senior economist Steven Thomson said the industry was yet to see the impact of cull cows being sold off in huge numbers.
“And it’s not just in Scotland,” he said.
“In England some of the biggest farms have already taken a 25% cut in basic payment, so farmers are adjusting their structures, which has tightened supply, and Ireland are looking for other markets and their suckler herd is also reducing.
“What scares me slightly is that I’m hearing people say they might put cattle off at the back end. If everyone thinks the same way there will be a glut and we could see prices come crashing down.”