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Farming: Concern over changes to livestock supply chain infrastructure

By David Porter

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Livestock Committee Chair for NFU Scotland Hugh Fraser
Livestock Committee Chair for NFU Scotland Hugh Fraser

The recent changes in supply chain infrastructure have sent shockwaves through the livestock industry, writes Hugh Fraser, Livestock Committee Chair for NFU Scotland.

The closure of Forfar mart and more recently the acquisition of parts of Scotbeef's business by ABP mean fewer players in the marketplace.

It is clear that stock numbers are falling - if we are to halt this decline in numbers, we need the right signals from the marketplace, in regard to the right price and a transparent way of setting it.

Whilst we welcome the news that ABP will continue to operate Bridge of Allan and Queenslie, many of us remain concerned on the differences in procurement strategies and what this could mean moving forward.

The live ring is the most transparent way of price setting as was clearly seen this Spring when deadweight hogg trade lagged behind the ring for some time.

We are seeing a similar pattern with beef trade, abattoirs are dropping the deadweight price whilst demand in the ring remains buoyant.

There are also threats to transparency and fairness of the Auction system from within its own ranks where we are witnessing Farm to Farm deals brokered by firms not necessarily local to an area, removing stock from the Ring in that area.

We must remain vigilant of this before we see more Marts closure as seen in Forfar. The primary producer is the first step in a lengthy supply chain and is a price taker with little bargaining power.

The supply chain relies on steady footfall through the auction mart and we rely on the live ring for a fair price. We cannot have one without the other. Without critical mass, it quickly becomes unviable for processors and markets to continue.

That being said, a commitment to invest and maintain Scottish processing is of equal importance. We continue to engage with all processors to underline our concerns as the primary producers and raise mutual areas of concern with officials.

If you have particular concern, please get in touch.

We recently participated in a Grocery Round Table with the Competitions and Markets Authority (CMA). During this we highlighted our members’ concerns and demonstrated how current markets and competition will impact food security and prices.

It is crucial that the challenges we face are understood by the market and in return we are given a fair price to encourage investment in our businesses to maintain livestock numbers and protect our critical mass.

Furthermore, we continue to emphasise how the uncertainty in future policy is impacting our industry. Farmers and crofters need clear direction on the future of agriculture policy to give them confidence to invest in their futures, this is in the interest of all supply chain stakeholders including the consumer.

Future policy must recognise and reward agriculture so the sector can continue to deliver on the three challenges of food production, tackling climate change and enhancing biodiversity.

We know that cattle numbers are decreasing, it is in everyone’s interest that this is taken seriously by retailers, consumers, Governments and others. Scotland’s critical mass is fundamental in retaining viable supply chains and vibrant rural communities.

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