Sheep and lamb processing: assessment

1 Introduction

1.1 This report presents findings of a project, commissioned by the Scottish Government and overseen by a Steering Group including industry representatives, to assess the opportunities for increasing the number of sheep processed in Scotland.

1.2 The motivation for the project was that, continuing a long-term trend, the majority of Scottish-born sheep going to slaughter in 2018 did so outwith Scotland: only 42% of Scottish-born lambs, and almost no ewes or rams, were processed in Scotland.

1.3 If a greater number of sheep were retained for processing, the Scottish economy could gain additional employment, value added and export volumes. In turn, this would support the sheep sector's contribution to rural communities, heritage and landscapes. Uncertainties around Brexit add some urgency to such considerations. In addition, reduced reliance on long-distance haulage of live animals to abattoirs in southern Britain could mitigate some animal welfare and transport-carbon emission concerns.

1.4 The project had four objectives:

i. Investigate, through a literature review and engagement with a wide range of stakeholders, the key drivers for the reduction in sheep slaughter and processing numbers in Scotland, including the impact it has had on the supply chain

ii. Provide an assessment of what needs to be done by the industry and Government to a) increase lamb processing in Scotland and b) combat the significant leakage and displacement of activity that is currently going south of the border (England and Wales)

iii. Explore what opportunities or challenges there are for Scotch Lamb to tap into other growing market opportunities in the UK or overseas

iv. Provide recommendations for policy and industry to ensure a strong and profitable industry for the future.

1.1 Methodology

1.5 To meet these objectives, the project team undertook a literature review, analysed available statistics and, importantly, contacted and/or interviewed a range of industry members and stakeholder experts.

1.6 Relevant literature, including government and industry reports as well as academic papers, were identified through a combination of formal database searches and referrals from industry and stakeholder contacts, plus the research teams' own prior knowledge (see References for list of published material consulted).

1.7 Insights offered by the literature included perspectives on the Scottish industry relative to its own history, the evolution of production and consumption patterns for sheepmeat and other meats, and industry and market developments outwith Scotland.

1.8 Statistical data that were used included publicly available aggregate figures for livestock numbers, slaughter volumes, trade volumes and consumption patterns, plus also some disaggregated but restricted-access and/or commercially sensitive information offering greater detail (see Appendix 2 for key summary data).

1.9 Insights offered by statistical data included quantification of trends in the level and composition of demand for lamb and other meats, but also a highlighting of some issues around information gaps.

1.10 A range of industry members from different parts of the supply-chain plus selected stakeholder experts were, with assistance from the project's Steering Group, identified and approached for their views. In some cases this was simply by email, but in many cases it was via a telephone or face-to-face interview (see Appendix 1 for a list of people and summary discussion guides used).

1.11 Input offered by industry members and stakeholder experts included practitioner perspectives on operational and strategic challenges and opportunities, but also some commercially sensitive information not available from other sources.

1.12 Given information gaps arising from incomplete official data and commercial sensitivities, insights offered by industry members and stakeholder experts were crucial to understanding the practicalities of realising ambitions to increase processing volumes.

1.13 Although these insights were typically qualitative and subjective in nature, the consistency of themes and points raised in discussion, plus triangulation with the literature and statistical analysis, offers reassurance that the report's findings are sufficiently illustrative of broad patterns and trends to support conclusions and recommendations that are reliable and relevant.

1.14 The remainder of the report is structured as follows: the next Chapter 2 summarises the current position of the Scottish sheep sector; Chapter 3 presents an analysis of different markets for Scottish sheepmeat; Chapter 4 considers potential opportunities for increasing Scottish processing; Chapter 5 offers some conclusions and recommendations; and a series of Appendices provide some supporting material.