£100bn trade deal – how much will farming get?

• Beef
• Pork
• Poultrymeat and eggs
• Dairy
• Sheepmeat
• Grain

©Tim Scrivener

1. US is strong competitor – low costs, high productivity. EU uncompetitive on price – smaller herds, expensive land and labour.
2. EU restricts US beef imports (high tariffs and ban on hormone treatments) – these could be lifted or US could segregate production to supply non-hormone-treated beef.
3. US beef supplies are tight, but can expand quickly.
4. Two-thirds of EU beef comes from dairy herds and so production is inelastic – suckler cow sector particularly at risk.
5. EU sector not geared up for export – was one of world’s biggest beef exporters, now one of biggest importers.
6. Could have large social impact – regional production, highly dependent local economy.

Opportunities

1. Sales of EU beef currently restricted in US (BSE fears). Deal could ease this, but red tape to overcome.
2. AHDB estimates UK exports could increase 5% to £23m.
3. Likely to benefit niche markets – speciality meats, and demand for non-hormone-treated beef.
4. See dairy for genetic benefits.

Threats

©Tim Scrivener

Threats

1. US major producer and exporter – US experts believe production will increase, with large proportion for exports.
2. More stringent standards in EU/UK mean sector not price- competitive – agreement that did not recognise this could seriously disrupt market.
3. Methods/products allowed by the US but not in the EU include: Gestation stalls for sows; castration (being phased out in EU and generally not used in UK); antibiotics as growth promoters; ractopamine (banned in many countries and in EU since 1990s); processed animal protein; wider variety of GM products fed.
4. US likely to focus on exporting cuts rather than whole carcass – competitive and likely to undervalue EU products.

Opportunities

1. EU/UK may be able to access more niche markets where US consumers are concerned about quality/health/welfare standards.
2. Biggest benefit likely to be for producers of speciality products, such as Parma ham. Spain and Italy most likely to benefit.

Threats

©Tim Scrivener

Threats

1. US exports to EU limited (washing poultry in chlorinated solution and use of antibiotic growth promoters banned in EU). If EU lifted ban, market could be disrupted by imports of cheaper chicken – US could export between $200m (£130m)and $300m (£195m) worth.
2. Lower meat production costs in US – checks made along supply chain in EU, but in US only at end.
3. Egg production costs in US thought to be 25% lower – more stringent standards in EU, for example enriched colony cages twice as big as in US.
4. BPC says lower standards could damage consumer confidence and erode EU’s system of regulation and responsible approach with checks throughout production.
5. NFU wants poultrymeat and eggs classified as “sensitive” and for any new quotas for US poultry meat to have balanced allocation between cuts and carcasses.

Opportunities

1. Possible opportunity to export British poultry, especially to speciality markets.
2. Opportunity to set sanitary and phytosanitary requirements that influence global rules, ensuring consumers enjoy poultry of similar standard and quality to UK and EU.                          

Threats

©Tim Scrivener

Threats

1. Integrity of products at risk if stringent EU food hygiene and safety standards are not met – for example, a ban on use of hormones.

Opportunities

1. Access to US market currently difficult – if high tariffs removed, EU may gain cost advantage over competitors.
2. Deal could remove non-tariff barriers – for example, foreign dairy imports into US must currently come from approved list.
3. US market attractive, particularly for high-value products, specialist nutritional products (for example, sports nutrition), and branded products, including those with PGI status. A number of British dairy processors are making export of quality dairy products central to business plans.
4. EU imports $59m (£38m)in bovine semen annually – more than half from the US, but EU legislation limits expansion. US genetic material and advancements important to UK dairy and could benefit from relaxation of trade barriers.

©Mint Images/Rex Shutterstock

Threats

1. US does not have a big sheep flock, so unlikely to pose large threat to EU/UK lamb
2. It could however refuse to take EU/UK lamb because of differing standards

Opportunities

1. US does not have a big sheep flock, so unlikely to pose large threat to EU/UK lamb.
2. It could however refuse to take EU/UK lamb because of differing standards.

©Tim Scrivener

Threats

1. US is large grain producer and highly competitive in wheat and corn – good soils in corn belt, cheap and vast land in Wheat belt.
2. EU tariffs provide high level of protection for farmers when prices are low, particularly for medium to low quality wheat
3. EU parliament report has warned that trade deal could lead to large wheat and corn imports from US

Opportunities

1. Potential access to cheaper feed.
2. Possibly more access to GM products, which would please some growers but not all, although this is an EU
   negotiator’s “red line”.

Sector information supplied by NFU, NPA, BPC, NSA, DairyUK. Material also taken from the EU policy department’s study on key threats and opportunities for agriculture from TTIP.