Covid-19 continues to cast a shadow on the red meat supply chain as plants can still be disrupted at short notice, Quality Meat Scotland warns.
Globally, diminished workforces can lead to the temporary closure of firms, with staff isolating because they have Covid-19 or because they are contacts of those who have the virus.
This is according to Stuart Ashworth, director of economics at Quality Meat Scotland (QMS), who noted that when an abattoir closed, it immediately created challenges for all in the supply chain.
“At one level, farmers cannot send animals for slaughter and at another the supply of meat to consumers becomes disrupted," he said.
Delays in animals reaching abattoirs can also lead to significant animal welfare concerns as numbers build up on farms.
Contingency plans to handle these situations can ripple through the whole supply chain, as was the case when the Scottish and UK pig supply chain were impacted by disruption to pork sites in East Anglia.
Mr Ashworth said: “What these disruptions show is how integrated the UK red meat supply chain is with specialist cutting and packing plants, for example, drawing raw material from several locations around the UK.
“Any slowing down of the efficiencies of the supply chain inevitably create cost, whether it simply be the feed cost of holding animals on farm or the increased transport and administration costs of moving product around the country."
Even short-term closures can significantly destabilise the market: "For example, during the summer closures of meat processing plants in America saw their farm gate prices collapse at the same time as wholesale meat prices escalated."
A second consequence of Covid-19 was the disruption to supply chains resulting from consumer lockdown, Mr Ashworth noted.
“This week there has been welcome news of short-term relaxations of UK rules for the Christmas period but they still leave restaurants closed," he added.
"This may prove to be good news for high street retailers of fresh meat and meat products but the balance of products to be sold may leave primary processors and manufacturers with a headache over carcase balance.
“As processors grapple with the vagaries of the pandemic, those who export meat to the EU are also trying to address and manage the impact of Brexit at the turn of the year.
"This of course is not helped by the lack of a conclusion to the Brexit discussions,” added Mr Ashworth.
He said the rules of trade would change on 1 January 2021, meaning significant disruption would occur.
The cost of that disruption would vary depending upon whether the UK becomes a third country trader to the EU with tariff free and quota free arrangements or a third country trader without a trade deal.
“The simple solution is to stop exporting for a short period in January until everything becomes clear and exporters get to grips with the new rules," Mr Ashworth said.
"The more complex solution is to continue trading and learn the new rules on the job. Either move will inevitably lead to significant volatility on farm gate prices and in some scenarios and for some species a permanent move to lower farmgate prices."
