Sheep farming contributes 8% of Scotland’s annual agricultural output ©123RF
Sheep farming contributes 8% of Scotland’s annual agricultural output ©123RF

Scottish sheep farming needs 'more coordinated supply chain'

7 September 2016

Better communication through the supply chain would help Scottish farmers meet consumer demand, a report has said.

The Scottish Sheep Sector Review, an industry group report conducted at the request of the Scottish government, has produced a set of policy recommendations to revitalise the country’s sheep industry.

It said developing a “whole-industry coordinated approach to supply… could have a significant impact on supply chain efficiency and end-to-end margins”.

The economic output of the Scottish sheep sector was estimated to be £242m in 2015, 8% of Scotland’s entire agricultural output. Every year the country produces about 1.34m lambs for slaughter, and between 6,000 and 7,000 tonnes of wool.

“However, farm revenues have fallen sharply in recent years and sheep producers rely heavily on subsidies to keep them in business,” said Fergus Ewing, Scotland’s rural economy secretary.

Overcoming the challenges the sector is facing “has the potential to benefit the Scottish sheep sector by more than £26 million per year”, he said, “but will require the buy-in and active participation of the entire supply chain”.

The report said the seasonal nature of Scottish sheep farming created an “imbalance” with the steady demand from consumers, and had “significant consequences on resources at all points in the supply chain”.

The report said abattoirs were a problematic bottleneck during peak production times as delays in getting sheep slaughtering could lead to livestock “moving outside of the optimum weights”, reducing margins for farmers.

It recommended the government and industry co-fund research to “support a more coordinated approach by the supply chain to deliver a supply profile better matched to market demand”.

The report also said the grading system used by retailers to assist in pricing does not give producers enough information about consumer requirements.

As sheep are already assigned individual electronic IDs, the report said this system should be built on to improve access to more metrics important to farmers, including product size, appearance and weight.

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