UK lamb and beef production could be put under pressure by a free trade agreement being discussed by the EU and New Zealand.
New Zealand is the world’s biggest sheepmeat producer and is also a significant producer of beef, with production systems that allow it to be highly competitive on the world stage.
Currently it can only export 228,000t of sheepmeat a year to the EU before paying tariffs.
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But a free trade agreement – discussed last week by EU and New Zealand representatives – could eliminate these tariffs and allow in sheepmeat and beef that is more competitively priced that EU produced red meat.
This could be a blow for UK producers suffering from low farmgate prices, particularly sheepmeat producers who already have to compete with New Zealand imports on supermarket shelves and in foodservice.
John Royle, chief livestock advisor at the NFU, said that any such agreement that allowed the removal of tariffs would be something to be nervous about.
“With a free trade agreement between the EU and New Zealand you have to question if it’s a good thing for UK red meat production.”
New Zealand was highly competitive, innovative and changes to the traditional seasonality of trade had impacted the profitability of EU sheep production, he said.
In addition, the trade had changed, with a switch from carcasses to cuts and frozen to fresh products.
In France – the UK’s biggest sheepmeat export destination – Mr Royle said consumers had responded well to the British “St George” brand but there was a need to maintain this market share.
However, the UK could face further competition in growing markets if New Zealand had greater access – such as Germany where the EU-funded generic lamb promotion (Tasty Easy Fun) was attempting to grow sheepmeat consumption.
Negotiations are still in their early stages but the EU has said it would like to move “swiftly” to achieve a “deep and high-quality free trade agreement.”
Mr Royle said the trade deal must consider one of the Commission’s objectives, which was to improve the profitability of sheep production in the EU.
The EU is New Zealand’s biggest export market for sheepmeat and second biggest market for chilled beef exports.