Government support should focus on stopping the lamb market from crashing, with the threat of a no-deal Brexit hitting home on the continent.
British Meat Processors Association chief executive Nick Allen said retailers in the EU were refusing to sign long-term contracts due to the threat of tariffs on lamb after a no-deal Brexit.
“They are not saying they are not going to buy it, but they will not offer long-term contracts,” he said.
Retailers were instead proposing to buy at ‘spot prices’ which, after tariffs, would make UK product uncompetitive.
Mr Allen said come October 31, there would be an immediate ‘crash’ in farmgate prices, although they did not know how low it would go.
National Sheep Association chief executive Phil Stocker said it showed it was already affecting the sector with people’s order books ‘fairly flat’.
He added the uncertainty was around the allocations of tariffs and continuity of trade and if the Government could ‘relieve’ that, a crash could be averted.
While this could raise issues at the World Trade Organisation with state aid rules, Mr Stocker said if money was going into the market anywhere it was going to ‘distort it’.
“Let us just think about a way of relieving this tariff cost,” he said.
While he was not surprised retailers did not want to commit, Livestock Auctioneers Association executive secretary Chris Dodds said it was good they would buy if the price was right.
Mr Dodds urged the Government to find a way to support the industry which maintained a ‘realistic’ prime lamb price.
“Headage payments will not stop the market crashing. It will encourage it,” he said.
Duncan Wyatt, AHDB livestock lead analyst, highlighted the industry would not really know the impact until it happened, but UK farmers might not have to bear all the tariff impact due to global circumstances.
“There is strong demand in Asia. In Australia and New Zealand, supplies are challenged,” said Mr Wyatt.
He said if European countries wanted to make up volumes and the UK had third country status, buyers may meet the UK ‘somewhere in between’.