The sheep industry awaits its fate in regard to Brexit, according to Richard King, of Andersons Consultants.
Speaking at the Scottish launch of the company’s Outlook document at Carfraemill, Mr King predicted a smaller but more productive sheep sector would emerge from Brexit.
He did, however, sound a warning over the allocation of tariff rate quotas in the event of a no deal scenario.
Currently, New Zealand can send 225,000 tonnes of lamb each year to the EU.
If there was no agreement between the EU and the UK, the allocation of the tonnage would be decided by the World Trade Organisation (WTO).
Mr King said: “All members [currently 157] of the WTO would have to sign up and who knows, New Zealand might argue to send it all to the UK or 225,000 tonnes to the UK and another 225,000t to the EU.”
The situation for beef was complex. About 70 per cent of UK imports come from the Republic of Ireland, which could offer an opportunity for substitution. But at the same time, the Scottish sector was heavily reliant on direct payments to maintain incomes.
“I think beef numbers may decline overall but not collapse. There might be fewer and different people involved,” said Mr King.
“The producer with 20 to 50 cows around the farm because they like having them might not last without support.
“But at the same time, small farms have proved to be very resilient, especially those with low borrowings and low drawings. They have an amazing ability to tighten their belts another notch.
“Those who are over borrowed might be casualties, though.”
David Siddle, director of Andersons Northern, said analysis over the years had shown the top quartile of farm business invariably had a low cost base.
This applied across all sizes of farm and scale was generally not a factor.
The rapidly increasing cost of machinery was highlighted by the audience as being of real concern.
Mr Siddle agreed; saying times were just not hard enough at the moment to encourage the level of machinery sharing that was required.
He added: “This has been a better year for arable farmers, particularly those in potatoes, but whatever you do do not go out and blow your money on a selfpropelled potato harvester without thinking very hard about it.”