No deal challenges across beef and lamb

With the Brexit clock ticking, AHDB’s latest Horizon report presents new insight into the potential impacts on the UK’s trade in agricultural and horticultural goods.

Brexit prospects for UK agri-food trade examines in detail how both an orderly withdrawal and a no-deal scenario will affect trade across the UK’s main farming sectors and a ‘bite-size’ versions has been produced for beef and lamb.

Using the latest data, the full report looks at the current trade situation, potential tariff levels and the size of the domestic production base to reveal a complex picture for UK agriculture and horticulture after Brexit. It provides ready comparisons between sectors in terms of imports and exports, self-sufficiency and tariff levels.

UK exports of agricultural and horticultural products are likely to be rendered uncompetitive if World Trade Organisation (WTO) tariffs come into play on our exports to the EU. By plotting the value share of particular food products in imports and exports markets against its ad valorem tariff, the report visualises which goods would be most affected by the imposition of WTO rules if the UK defaults to no-deal.

In addition, if the Government decides to drop all tariffs on imports from the EU this would have to apply to the rest of the world, meaning UK products could face increased competition on the domestic market. In many sectors, UK costs of production are high when compared with those of key international competitors. No deal could mean the loss of tariff barrier protection and more competition from global producers.

AHDB Beef and Lamb Strategy Director Will Jackson said: “The prospect of a no-deal scenario cannot be ignored. This would have a seismic impact on UK trade, with major implications for the farming sectors.

“At AHDB we are working to raise awareness of those potential impacts for sheep and beef farmers, through reports like this, and our online Brexit hub. More specifically, we are exploring ways to open new markets abroad for UK produce.”

Other key findings include:

The sheep meat sector is likely to be the worst hit by a no-deal Brexit. UK exports would suffer considerably if WTO tariffs of up to 50 per cent of the price of meat were put in place – a huge blow to the UK’s competitiveness. In addition, around 90 per cent of UK sheep meat exports are to the EU, meaning no deal is likely to hit sheep farmers’ incomes. AHDB has examined the potential impact of no deal on UK sheep meat production in an in-depth report.

For beef, exports to the EU would also be limited considerably if tariffs, which are sometimes as high as the price of the product itself, came into play. Again, if the UK Government drops tariffs on imports, UK beef could see increased competition, meaning lower prices and returns for farmers

For all Brexit news, information and analysis, including the potential impacts of various scenarios on farm business incomes, go to www.ahdb.org.uk/brexit