Arguably the value of trade in farmed products has never been so important for Britain’s farmers.
There are now less than four months for a trade deal to be brokered with the EU, while the UK is also negotiating long-lasting deals with the US, Australia, New Zealand and Japan.
In the first six months of 2020, the UK exported £10 billion in food goods, which compared to £11.5bn in the first six months of 2019.
Imports were at £23.5bn, down from £24.3bn in the first half of 2019.
Coronavirus has had an impact on both exports and imports, mainly because of the closure of restaurants across Europe and the UK during lockdown.
The UK’s food trade deficit in the first half of 2020 was £13.5bn, £700 million more than the same period in 2019.
During the first half of the year, only two major categories delivered a trade surplus: cereals (wheat and barley) at £30m; and sheepmeat at £2m, although the annual surplus for sheep was at £67m.
The UK is most dependent on fruit and vegetable imports, where the trade deficit in the first six months of the year was £2.4bn and £2.4bn, respectively.
The EU is a key market for British farmers with 60 per cent of all food exports sent to EU customers and 70 per cent of all food imports being from the union.
The imposition of tariffs in the event of the UK and EU not agreeing a free-trade agreement would be impactful.
A 2019 study by Warwick and Bristol universities estimated the average British food bill would increase by 22.5 per cent to £71 a week in the event of a no-deal, while demand for British products in the EU could fall significantly as prices rise.
Meat and animal products would be among the most affected. Under the EU’s tariff regime, UK beef carcase exports would attract duties of 12.8 per cent plus €176.80/100kg (£159 using an exchange of €1:£0.90), with 12.8 per cent and €171.30/100kg (£154) for lamb, €53.60/100kg (£48) for pigmeat and €26.20/100kg (£23.50) for poultry meat.
Butter exports to the EU would be subject to a €189.60/100kg (£170) duty, with Cheddar at a €167.10/100kg tariff (£150). Wheat and barley sales to the EU would attract a tariff of at least £83/tonne.
The UK has streamlined its proposed tariffs, which means EU imports would be subject to a slightly lower tariff than UK exports to the EU.
So for example, beef imports would attract a 12 per cent tariff plus £147/100kg, Cheddar a duty of £139/100kg and wheat £79/t.
The impact of tariffs on EU food imports on UK shoppers could lead to the UK reducing or even abandoning duties, according to Nick von Westenholz, NFU director of EU Exit, who spoke at a Guild of Agricultural Journalists Brexit briefing.
But he said the EU was unlikely to follow suit and reduce tariffs on UK food imports, which could leave British farmers at a massive disadvantage.
However, if import tariffs do remain, that could mean there is more opportunity to sell British produced food in the home market.
The Government has also said it will look at supporting lamb producers who could be particularly badly hit by the imposition of tariffs.
There has been an encouraging increase in red meat sales to non-EU markets recently, according to Dr Phil Hadley, international market development director at AHDB.
He said: “There are a number of positive factors for the first half of 2020, including our exports to non-EU countries and, while Europe remains our most significant market for red meat exports, it is imperative with Brexit on the horizon, that we continue to take advantage of the opportunities third countries offer.”
Pork sales to non-EU markets rose by 17 per cent in the year to the end of June and now account for nearly 60 per cent of all pork exports, with the value of beef exports to non-EU markets up 46 per cent.
China is now the UK’s largest pork market, while Japan, the Philippines and Canada are regular British beef buyers. They could be joined by China and the US later in the year.
Future trade deals with non-EU countries could increase access to large markets for British products, but that might come at the price of reduced tariffs and greater access for food imports.