September 11, 2020

 

Higher beef prices if no European Union deal

 

According to Scottish levy board QMS, beef farmers may see a further swell in prices in 2021 if the United Kingdom and the European Union fail to agree on a free-trade deal.

 

The possibility of coming into a deal dropped after Prime Minister Boris Johnson said that the UK would walk away if terms on the World Trade Organization cannot be rapidly reached and traded on.

Some political commentators believe this posturing is intended to get the EU to compromise on remaining issues such as state aid and access to the UK's fishing waters.

A 40% tariff would be imposed on imported beef from all countries if no deal would be reached. This will put beef from Ireland on the same footing as imports from Brazil and Argentina.

 

According to QMS director of economic services Stuart Ashworth, although British products leaving the country would be hit with tariffs when entering the EU, the net effect is likely to drive prices up as the UK is not self-sufficient in beef production.

While the UK was about 86% self-sufficient in 2019 for beef, this does not take into account the demand and supply for different cuts of meat.

 

A growth of 0.1% in calf registrations in Scotland last year provided an increase to 552,700 registrations after three years of declines, but this is still 1.7% below the five-year average.

 

"There is generally an expectation that volume of cattle in the supply chain over the next six months will remain tighter than normal," said Ashworth.

 

He added: "Even without all the necessary information, (producers) need to prepare for the additional logistical barriers presented by leaving the EU's single market and processors are working hard to be ready for the new trading regime next year.

 

"It is unlikely that all the information will be available until the exact detail of the trading relationship becomes clear. Soft Brexit or hard Brexit – we will be able to trade. The biggest concern remains the extent of quota and tariff-free trade with Europe."

 

- Farmers Weekly