UK exports of sheep meat, dairy, and beef to remain stable despite NZ/EU agreement

Improved access for New Zealand sheep meat, beef and dairy to the EU as part of the new NZ/EU Free Trade Agreement (FTA) is unlikely to pose a threat to UK exports.

Analysis from the Agriculture and Horticulture Development Board (AHDB) has revealed that while the NZ/EU FTA that came into force this week (May 1) will allow for increased volume of New Zealand sheep meat to the EU it is unlikely to displace UK exports to the region.

The EU is the UK’s largest market for sheep meat, with 79,700 tonnes of fresh and frozen product shipped in 2023 valued at £524 million. It is the second largest market for New Zealand sheep meat with 54,000 tonnes of product shipped to the market last year.

The largest cut exported to the EU from the UK is fresh lamb carcases, which accounts for 84% of total UK sheep meat exports to the region. Volumes of fresh/chilled sheep meat exported from New Zealand to the EU are much lower than frozen, given the length of shipping time to market. The largest cut exported from New Zealand include frozen bone-in lamb, assumed to be frozen sheep legs, at 47% of total exports.

Jess Corsair, AHDB senior economist, noted the concern aired in the industry that the NZ/EU FTA could result in a deluge of New Zealand sheep meat entering the EU market posing a threat to the UK export trade.

“However, our analysis has highlighted several factors to allay the concerns of UK sheep meat exporters. EU sheep meat production fell in 2023 and is expected to fall further this year, helping to consolidate the UK’s position as the major supplier to this market,” Corsair said. “Given the different products and markets of the UK and New Zealand, it would suggest that when the new FTA is in force, New Zealand product will not displace UK sheep meat exports to the EU.”

AHDB’s analysis also revealed that while NZ/EU FTA will also provide for improved access for dairy products to the EU, the UK’s strong foothold in the market should put it on a sound footing to remain a key exporter to the region. Similarly, the UK exports much more beef to the EU than New Zealand.

Corsair added: “The UK’s market share in the EU for the main dairy products – milk powder, butter, cheese and dairy processed animal proteins and whey products – is strong at 65%, 70%, 64% and 66% respectively. Butter is the only category where New Zealand has had a notable market share and this is falling. As such, the UK is likely to remain a key exporter of dairy products to the EU.

“About a third of New Zealand beef exports to the EU are fresh boneless cuts, but in a much smaller amounts than the UK. That said it will be an important area to keep an eye on as the trade deal comes into place.

“The overarching feeling is that, based on our analysis, sheep meat, dairy and beef exports from the UK to the EU should not be adversely affected by the NZ/EU trade deal. We will, however, continue to monitor trade as it evolves as any changes to New Zealand’s relationship with its other trading partners may have a knock-on effect on EU trade.”

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