The red meat sector is rapidly adjusting to a “rebalancing” of demand as social distancing measures and school closures make their mark on the food supply chain.
The food service sector’s demand for red meat has plummeted and exports have slowed to a trickle, but fresh produce is flying off the shelves as consumers respond to the coronavirus crisis.
According to the latest market commentary by Quality Meat Scotland (QMS), products like mince, roasting joints and burgers are increasing in popularity and food manufacturing companies have reported firm demand for red meat-based products such as steak pies and sausages.
QMS economics analyst Iain Macdonald acknowledged incomes and spending power will fall as companies lay off workers or place staff on unpaid leave, but he said some businesses will see opportunity in the rebalancing of household spending and will act fast to hire newly unemployed workers to expand existing operations or offer new goods and services.
He said: “The reduction in eating-out opportunities may help sustain a boost in demand for steaks and other high-end cuts like lamb rack and pork fillet. Ready-to-cook meat dishes are also likely to do well in such an environment.
“Equally, however, there is also likely to be some trading down to the cheaper cuts by budget-constrained households.”
He said government intervention to support family budgets could also help underpin spending on food.
“Once the short-term spending splurge to re-stock kitchens comes to an end, the red meat sector may prove to be more resilient to the economic downturn than other parts of the economy if the need to maintain a healthy balanced diet leads to an increased share of budgets being allocated to red meat,” said Mr Macdonald.
“Nevertheless, the rebalancing of red meat demand is likely to present some challenges to the sector, such as being able to source enough of the correct packaging, machinery and delivery drivers.
“This latter point could prove particularly critical, given the specific qualifications needed to transport livestock, and QMS is subsequently seeking a temporary relaxation in drivers’ hours regulations.”
He said businesses will need to prove resilient to the increased likelihood of absences as workers fall ill or self-isolate and he warned in some instances, this could result in temporary site closures.
He added: “Recent episodes of panic-buying demonstrate just how valuable food security is to the population, and the sector’s workforce should be commended for putting themselves at risk to ensure people continue to have access to high quality red meat.”
nnicolson@thecourier.co.uk
