British Meat Processors Association
British Meat Processors Association
illustration of big fish eyeing small fish

Tough times for british exporters But meat bucks the trend

In the first quarter, the UK trade deficit in goods widened to £43.4 billion, a new record. Even taking into account services, for which the UK runs a surplus, the deficit has expanded to £15.6 billion. The benefits of the low Sterling post-referendum and of a strong world economy have been replaced by Brexit uncertainties, a sluggish growth of world trade and U.S. protectionism. 

According to a team of economists at Cambridge University led by Meredith Crowley, the uncertainty has had a significant negative effect on firms’ willingness to export. Namely, some 5,300 businesses due to start exporting to the EU have decided against it, while more than 5,400 have stopped selling there. Fewer SMEs export from the UK than our major competitors, a fact well acknowledged by government which has endeavoured to increase participation. The Brexit process has had the reverse effect.

Regarding food and drink, EU exports increased by 4.3% in 2018, whilst for Third Country exports fell by 0.3%. This means that the EU now represents a share of 61.4% of total exports of food & drink, up from 60.3% in 2017. With food representing a quarter of Northern Irish exports, the Province is the most exposed of all the British regions to Brexit vagaries. 

The flawed notion that UK exports to the EU can be easily and rapidly replaced by trade agreements and commerce with far afield countries must be exposed

In the first four months of the year, total lamb exports are up 11% to 29,227 (an underestimation) but exports to Third Countries fell back to 3.4% of total volumes. In contrast, exports of beef, pork and offal were supported by buoyant international meat markets, particularly with the Far East. Total beef exports are up 6% to 42,079 tonnes with non-EU exports up 79% year-on-year. They now represent 20% of total exports. Pork exports are stable at 74,475 tonnes with exports to Third Country now representing 40% of the total. The bulk of British offal has, for some time, been exported or re-exported to outside the EU.

The new Brexit delay is helpful as we do not have trade agreement so far in place with important destination countries such as Japan, Korea and Canada, and can keep on exporting using the existing EU arrangements. The second half of 2019 looks promising due to the potentially huge effect of the African Swine Fever epidemic effect on Chinese and Vietnamese pork supplies. There, pork production will be markedly down from next month, sucking imports at high prices from Europe. European pork volumes will not suffice to bridge the gap, consequently, international beef and poultry prices will also rise. Another consequence will be the lowering of Chinese soya demand, which should help maintain feed prices low.

The flawed notion that UK exports to the EU can be easily and rapidly replaced by trade agreements and commerce with far afield countries must be exposed as meat exporters face tariffs, trade and administrative barriers as well as political, religious, competitiveness and logistical issues. The reality of trade is more prosaic and nearer to those shores in the Single Market. The new threat of tariffs on our successful exports of pork and dairy products to the USA illustrates the risks. 

Current Brexit uncertainties mean cancelled orders and caution from international meat buyers who are sitting on the fence, waiting for a clarification of trade conditions before starting or developing businesses. It is not easy to be a British meat exporter even if, for now, meat bucks the trend.

Jean-Pierre Garnier

About Jean-Pierre Garnier

Jean-Pierre is CEO of Meatwise International a marketing, strategic and technical consultancy for the meat production chain. Prior to Meatwise, Jean-Pierre was Head of Exports at AHDB for 13 years.

Topics

Latest

Barcodes being applied to meat

EU buyers not committing to UK meat orders over fears of no-deal Brexit tariffs

A sense of panic is now gripping the UK meat...

Computer screen with beef price falling

Perfect storm of supply and demand for farm gate beef prices

The recent collapse in the farm gate beef price has...

Couple dancing the tango

It takes WTO to tango

Chris Patten, the last Governor of Hong Kong said in...

Container ship heading into port

Is frictionless trade post Brexit achievable?

In the time it will take to read this article,...

Dr Michael Mosley's article makes for a good read and cuts through the mis-information surrounding the meat debate.

The scapegoating of meat is dangerous and will see us ignoring things like fossil fuel use and ultra-processed foods, things that are actually hurting our health and the planet - @fleroy1974

Listen to Prof. Leroy's thoughts on the scapegoating of meat 👇

https://t.co/sJnavSRT8S

Land in the UK is highly suited to livestock. Our established grasslands are the 2nd largest store of carbon in the UK – unlike livestock production abroad that relies on clearing existing forests. We won’t stop climate change by downsizing this kind of UK production.