Written by Agriland Team
Low prices for skins and hides internationally due to changes in fashion and consumer spending are having a knock-on effect on the red meat industry, according to the latest market commentary by Quality Meat Scotland (QMS).
Slaughtering and processing red meat inevitably leads to the production of what are sometimes referred to as ‘co-products’ which can create both revenue and cost for the processing sector.
In the red meat chain, co-products include both edible and inedible offals, skins and hides, and some products classified as “Specified Risk Materials”, meaning their sale and disposal is strictly controlled.
Stuart Ashworth, director of economic services with Quality Meat Scotland (QMS), said: “The use of leather in car and aircraft upholstery has historically been an important market, however, the use of faux leather and reduced demand for cars has hit demand hard over the past few years.
“Similarly, the decline in leather footwear has reduced demand for leather over several years.
These long-standing changes in the marketplace, alongside the costs of addressing the environmental impact of the tanning and processing of hides and skins, have driven prices lower over the past five years.
“Cattle hides have fallen in value by more than 60% and sheepskins have fallen by 70% over the past five years,” said Ashworth.
With only a small number of tanners and processors in the UK, exports are vital to the UK supply chain. China is the dominant buyer of UK hides and skins, but other important markets include Turkey, Pakistan and Italy.
Other significant non-edible co-products include meat and bone meal, processed animal proteins and tallow.
“The market for animal fats, like tallow, has strengthened over the past year with prices increasing 10-15% as these products have a role to play in producing bio-energy,” said Ashworth.
“However, recent falls in the price of oil have held back tallow prices in the past couple of months,” he added.
In contrast, the market for meat and bone meals and processed animal proteins has cooled over the past couple of years. These products are often used in aquaculture diets, with significant demand in the Asian markets, or pet foods.
“Irrespective of the final version of Brexit that results at the end of December, significant disruptions are likely in the way in which these co-products of the red meat supply chain are traded with Europe and the rest of the world, with an associated risk of potential loss of revenue to the red meat sector,” concluded Ashworth.
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