Tuesday, 19 March 2019 14:27

Keep calm – Brexit

Written by  Pam Tipa
Justin Sherrard. Justin Sherrard.

Brexit is a messy situation and how it will end is not clear, says Rabobank’s global strategist for animal protein Justin Sherrard.

He was speaking last week to Rural News just as another Brexit deal vote was defeated again in the UK Parliament.

“Right now I think there could possibly be a delay in the process... scheduled to run until the end of this month when the UK would exit the EU.

“I think now the likelihood of a delay has just gone up and the likelihood of getting an organised soft Brexit might have just gone down a little bit.”

But from New Zealand’s point of view he sees no downside in our sheepmeat trade with the UK. 

“The potential downside is food price inflation and whether you see the edge come off UK demand under a hard Brexit situation. If they are able somehow to engineer a delay or a soft Brexit outcome then we won’t see any change.”

Even if there were a hard Brexit then NZ would still be well placed, he says. Its relationships with UK retailers and food service have been well developed and nurtured by meat processors and exporters from NZ. 

“Also, in sheepmeat it’s not like there are lots of other suppliers. There’s not a lot of exportable sheepmeat around the world, particularly the cuts British consumers want. You will see a little bit of change there but not a lot.

“Beef might be different: if there is a hard Brexit outcome you probably will see increased access to the UK market for South Americans and for Australia. 

“The UK market will pay more for certain cuts than South East Asia, for example, so it will be an attractive market to export to.

“But I don’t think there will be change during 2019 because even though there is turmoil in the market I think people will try to keep all those supply relationships intact. There will be too much to worry about to be starting to think about additional opportunities. We will just have to wait and see exactly where this ends up.” 

Meanwhile, Dave Harrison, Beef + Lamb NZ general manager policy and advocacy, says he has been in London to plan for a no-deal Brexit and ensure we are as prepared as we can be for the worst outcome.

“The assurances we are getting from both the European Union and the UK are that New Zealand food products shouldn’t be affected too greatly even in the event of a hard Brexit,” he told Rural News.

“The noises being made are they will be pragmatic and accept current certificates and the fact that we are already going into ports dealing with third-country imports should mean it will almost be business as usual,” Harrison says.

“The risk is that resources could be diverted from those ports in the UK to roll-on roll-off ferries between the UK and the Continent. If they had to do divert resources from the traditional ports to there, that would be problematic.”

Harrison admits there is still a huge amount of uncertainty.

“As much as we are getting these reassurances it would be really nice if they could have an orderly transition.”

More like this

Dairy demand on the rise

There is increasing evidence that dairy demand is on the upswing, according to Rabobank senior agricultural analyst Emma Higgins.

Carrot and stick approach needed

With increasing and rising financial challenges, a well-balanced combination of carrot and stick will be needed to help dairy companies reduce greenhouse gas (GHG) emissions.

"Further rate hikes unlikely"

According to Rabobank, inflation expectations in the New Zealand economy are headed in the right direction, with interest rate relief on the cards for the second half of 2024.

Featured

Dairy sheep and goat turmoil

Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand for their products.

Hurry up and slow down!

OPINION: We have good friends from way back who had lived in one of our major cities for many years.

Editorial: Passage to India

OPINION: Even before the National-led coalition came into power, India was very much at the fore of its trade agenda.

National

Knowing bugs means fewer drugs

A mastitis management company claims to deliver the fastest and most accurate mastitis testing available at scale for New Zealand…

Machinery & Products

100 years of Farmall Tractors

Returning after an enforced break, the Wheat and Wheels Rally will take place on the Lauriston -Barhill Road, North-East of…

JD unveils its latest beast

John Deere has unveiled its most powerful tractor ever, with the launch of the all new 9RX Series Tractor line-up…

Biggest Quadtrac coming to NZ!

In the biggest announcement that Case IH Australia/New Zealand has made around its tractor range, its biggest tractor is about…

A different shade of blue for Norwood

Norwood and ARGO Tractors, the Italian manufacturer of Landini and McCormick tractors, have announced an agreement that gives Norwood exclusive…

Kubota tests diesel engines

Kubota last month used the UK LAMMA Show to test the water with its new 200hp, four-cylinder 09-series diesel engines.

» Latest Print Issues Online

The Hound

Why?

OPINION: A mate of yours truly wants to know why the beef schedule differential is now more than 45-50 cents…

Fat to cut

OPINION: Your canine crusader understands that MPI were recently in front of the Parliamentary Primary Sector Select Committee for an…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter