Sheep farmers have enjoyed much improved prices for all classes of stock this year, but the clock is ticking fast towards January, 1 2021, when huge changes are expected regardless of whether a trade deal between the EU and the UK is struck.

These were the overwhelming views of Rizvan Khalid, MD at Euro Quality Lambs; Dr Phil Hadley, international market development director at AHDB and Sarah Baker, senior strategic insight manager at AHDB who were speaking at a webinar on the globalisation of trade post Brexit.

“It is crucial we get a deal with no tariffs and minimal non-tariff barriers at the Customs Border Control Posts,” said Rizvan Khalid, whose family has been exporting lamb since the 1970s and now processes up to 25,000 head per week from their Shropshire base.

“A no deal equals big tariffs of 40-50% on lamb carcases which would have a huge impact and make the whole trade uneconomical.”

Even with a free trade deal, trading will be more difficult due to the increased paperwork and risk of having lorry loads rejected due to the new EORI registrations, and vets’ certificates required.

He said that at present, every lorry load destined for the EU post 2020 will have to be from an exporter from the new ‘Approved Establishment List’ and has to travel with an export health certificate which has been signed by an approved vet. As the rules stand at present, only sheep that have been on the same holding for the past 40 days will be able to exported post December 31, and new product labelling will be required to include the name and the address of the importer in the EU.

Furthermore, meat products will only be able to travel through designated Border Control Posts and in France that means Dunkirque, although it is also hoped Calais will also be opening next year.

“In theory the system should work, but it has not been tested and the biggest fear is it could collapse. We have been told that the only products being prioritised are day-old chicks and fish, which added to the threat of an on the spot inspection, makes customers think twice about ordering stock. The whole process limits the viability on the other side when transportation is going to take so much longer. We’ve already had smaller to medium-sized businesses tell us they are no longer interested importing,” added Mr Khalid.

Sarah Baker also insisted there would be massive changes.

“There will be trade friction regardless of whether we get a deal or not,” she said. “We have estimated that average operating costs will increase 5-8% even with a deal and that’s only on the additional paperwork and checks required. If individual loads are unlucky enough to get a spot check the costs could be a lot more.”

She also insisted that the opening up of free trade agreements with third countries would have limited effect.

“New markets in third countries are not going to replace the EU. Opening up a free trade agreement with the US, New Zealand and Australia doesn’t mean you can flood that market over night. Trade relationships still have to be built and these countries will have lower costs of production, therefore if the UK is going to export to those new countries it will have to send high quality goods,” she said.

On a more optimistic note, all remained positive for future exports.

“I don’t see the UK being a major exporter of commodities as we don’t have the economies of scale, but with a strong domestic market, I do see us being major producers of high quality, environmentally sound products that can be sent overseas,” she said

Dr Phil Hadley added: “The UK has a great reputation across the world for producing quality food and quality agricultural products and for being a relatively small country we can certainly punch above our weight in terms of quality but also at a higher price than our competitors but that also demonstrates the quality aspect of our products.”

However, while Mr Khalid was optimistic for sheep sector long-term, he warned against buying store lambs at extreme values.

“No one can understand why the store lamb trade is as high as it is when the export demand is very poor. I do think sheep farming will do well when there is a shortage of lamb worldwide and lamb is a protein that everyone loves. There is also an interesting synergy between grass-fed and carbon negative that can be developed,” concluded Mr Khalid.