A new report has highlighted the impact of barriers to trade if the UK leaves the EU without a deal.
Sheep farmers need to prepare for the worst and strengthen their businesses with the threat of a no-deal Brexit wiping out sheepmeat exports to Europe.
A new report, produced by Andersons for AHDB, Hybu Cig Cymru and Quality Meat Scotland, has highlighted the significant upheaval no deal would bring to the red meat sector.
And it was the impact of non-tariff measures which could weigh particularly heavily on the industry, hitting small- and medium-sized exporters (SMEs) disproportionately.
With a deal, sheepmeat exports could decline by 1.5 per cent, chiefly due to non-tariff measures, but without a deal the export trade to the EU could be almost completely wiped out and prices could drop by 24 per cent.
Sarah Baker, AHDB strategic insight manager, said as soon as the UK left the EU, exports would be subject to checks and administration, which would incur costs.
And this would have a disproportionate impact on SMEs as having one ‘unlucky load’ which was stopped could cause major losses.
Ms Baker said in the short-term there would be some demand from the EU, as the demand for UK light lamb was specific.
“In the short-term, there will be some mitigation. I can see the supply chain to some extent absorbing some of the additional costs,” she said.
But price rises may mean European consumers look for a cheaper protein or an alternative source of lamb over the longer term.
Lamb could be heavily discounted in the short-term in order to shift it and Ms Baker believed the brunt of this would fall on the farmer.
She also added alternative markets could not replace European trade quickly as it took time to build exports after securing market access.
She added: “The reason why the EU is so important is it has been built up for years and years.”
Ms Baker urged farmers to get their businesses ready for upheaval.
“If you prepare for the worst and it does not happen, all you have is a more profitable business,” she said.