No-deal Brexit can trigger a severe drop in Farm Business Income
The sheep sector is most vulnerable to a no-deal Brexit and the market risks to be oversupplied with sheep meat in the short term, according to the latest outlook on Brexit presented by Agricultural and Horticultural Development Board.
The EU’s role as a consumer of UK sheepmeat will impact the trade between the parts as tariffs imposed under no-deal Brexit scenario are at the same level for both sides. At the same time, the UK will keep tariff-free access for New Zealand and Australia and the market is expected to be oversupplied with sheep meat in the short term and will have to adjust.
"The EU’s role as a consumer of UK sheep meat means the sheep sector is most vulnerable to a no-deal Brexit. These exports will now face tariffs and although some imports will also be subject to equal measures, it’s expected the UK will be oversupplied with lamb for some time. The beef sector is perhaps at less risk and no huge changes are expected overnight. However markets will eventually be more open to global competition", said the analysis.
According to the outlook presented this week, less-favoured areas English beef and sheep farms could see their Farm Business Income (FBI) fall by over 60% in 2022 under a ‘no-deal’ Brexit scenario. For lowland beef and sheep farms, FBI could also fall by a similar amount (57%) in 2022 under the same conditions.
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