Brexit may hit red meat exports

This is the message from Beef+Lamb NZ and the Meat Industry Association (MIA).

"Our sheep and beef trade to both the UK and EU are inextricably linked through quota access and both are likely to be affected," says Sam McIvor, Beef+Lamb chief executive.

The EU is New Zealand's most valuable market for red meat and associated co-products, accounting for over $2 billion in trade last year.

New Zealand's sheepmeat quota to the EU of around 228,000 tonnes represents over half of New Zealand's sheepmeat exports. The UK currently takes half of that.

"As the UK negotiates its exit from the EU over the next couple of years it will likely be negotiating how much of these quotas will be transferred solely to them and on what terms," says Tim Ritchie, MIA chief executive.

There will be no immediate change to the export conditions to the UK and the EU as the UK will not officially leave the EU until they negotiate the terms of their 'exit'.

Beef+Lamb and the MIA's top priority will be to work with the Government to ensure access to the EU and UK is protected during this transition. They say they will also work hard to understand the wider impact of Brexit on the markets.

The New Zealand Meat Board and Beef+Lamb will be using their offices in the UK and EU to assist with this.

McIvor says under WTO rules, New Zealand expects that our overall levels of sheep and beef access to both the EU and UK will remain the same.

Ritchie says what it is unclear is the impact on the market dynamics in each of the UK and remaining EU market envelopes.

The UK is a major agricultural producer and much of this production currently goes to the EU under zero duties. Last year 90% of the UK's sheepmeat exports went to the EU.

If the UK loses its preferential access under Brexit, there will likely be over supply in their own market, dampening demand for imports from New Zealand.