Growth Ambitions

2. How we will… increase the economic value of beef and beef products through the supply chains

“There is plenty of evidence to show that by creating opportunities for young people to lead businesses, productivity increases – in some cases by up to 30% – making generational change a Key Focus Area in meeting both economic and sustainability ambitions”

We will achieve this through the following Key Focus Areas

(click each focus area to find out more)

2.1 Improve product quality and consistency
2.2 Identify and accelerate post-farm gate investment
2.3 Develop our global and domestic marketing
2.4 Improve market access to a range of high-value export markets
2.5 Increase the level of collaboration both within and outside the Scottish beef supply chain
2.6 Increase the level of planned generational renewal

Through the industry-wide consultation that ran in the spring of 2021, industry comments around where they see the strengths, weaknesses, opportunities and threats (SWOT) are summarised below:

To get Scotch Beef PGI on consumers’ plates, or turned into one of the many products made from beef animals, a complex chain that starts in fields and hills all over Scotland must work efficiently:

Strengths

  • Strong traceability from field to processor through ScotEID, with plans to implement Bovine EID in 2024.
  • Good network of auction markets throughout Scotland, including on the Islands, providing an effective and transparent place for farmers and crofters to market livestock.
  • An extremely resilient supply chain that has managed to cope with extreme market changes in 2020/2021 due to the Covid pandemic and the UK’s exit from the EU.
  • A strong processing sector, which adheres to high standards and goes to great lengths to maximise the end product.
  • A well-developed, well-resourced promotion and marketing programme, that aligns brands back to farm.
  • A world-leading science and research sector.

Opportunities

  • Use of field to fork supply chain data to link communication between supply chain partners and provide a platform for decision-making around production and genetics.
  • The UK’s exit from the EU has provided a renewed focus on international trade and opportunities exist to sell into high-value economies where the middle-class wealth is growing.
  • Automation of abattoir processes could offer improved efficiencies and long-term cost savings.
  • The ban on exporting dairy male calves opens new pathways and supply chain opportunities for dairy-bred calves.
  • The ‘fifth quarter’ (skins and horns): New funding for research into potential markets and new ways of curing skins, plus new uses for horns.
  • Increased consumer focus on local foods places high street butchers in an advantageous position.
  • There is an opportunity to increase the value of carcases by increasing the amount of product that is eligible to be labelled ‘Scotch’ being marketed as such.

Weaknesses

  • The industry is sometimes bound by tradition, and change has been slow over the past 15 years.
  • Silo mentality/lack of willingness to collaborate, which is not end-customer focused.
  • Low use of EID technology at farm level, despite some excellent Scottish examples.
  • Primary producers feel that the EUROP carcass grading system does not reward them for production that is consumer focused.
  • Abattoirs will not, or prefer not to, carry out a private kill for small producers and value-adders.
  • The cost of dealing with skin and horns (the so-called ‘fifth quarter’). They have little or no value and the value of hides has decreased significantly.

Threats

  • Consumers being influenced by perceptions of negative effects on health from eating red meat.
  • Higher costs of production and lack of profit means unviable businesses, fewer cattle and a shrinking of the industry.
  • Wage and input costs rising but an inability to get higher prices for products.
  • Erosion of the Scotch premium from a change in market structure and a more rapid rollout of innovation from rival brands.
  • Competition from bioenergy for food and drink by-products is driving up costs of production.
  • Legislative changes, such as that concerning animal transport, is increasing costs, but not in a way seen in other countries.

Scotland’s beef supply chain is a complex network reliant on primary producers, auction markets, processors, hauliers and retilers all working together.

A mix of stratified breeders, rearer finishers, dairy producers and specialist finishers work to determine the best type of production system for the land, feeding cattle into one of the 20 abattoirs that handle cattle in Scotland.

While the diverse range of production systems means we can utilise the land in different ways, it also means that beef products in Scotland which come under the Scotch Beef PGI brand can vary in consistency and quality.

At Scottish abattoirs in 2020, 31% of steers were outside the grade range of E, U or R for conformation and 2 or 3L for fat cover.

Meanwhile, 3.5% of steer carcases were in grades with an average UK specification carcase weight of more than 400kg, with 28% being in grades which averaged over 380kg in 2020.