Britain’s vote last week to leave the European Union has rocked global stock markets — and the global meat industry.
On the whole, food and beverage companies did not support the separation, because it brings with it so many unknowns. Uncertainty — especially as it concerns trade — is expected to continue for the next two years as specific plans materialize.
As of right now, here’s what analysts believe Brexit might mean for meat.
A weakened pound may cause a hike in food prices. Bacon is seen as particularly vulnerable.
Britain imports about 45% of its meat and meat products, especially from Ireland, the Netherlands, Denmark, and Germany.
This is likely to continue. International Meat Trade Association CEO Liz Murphy said: “Industry and UK consumers expect access to high-quality meat products, and require stability and a continued supply from all sources, including the EU.”
The question is what type of tariffs and trade restrictions might be put in place and how they’ll affect markets both within and outside of the EU.
A weakened euro may confer an advantage on EU companies when it comes to trade.
US Meat Export Federation Vice President Joe Schuele noted: “The weak euro created a significant price advantage for EU pork in many key markets for some time, but the euro has recently regained some strength. We hope to see that continue, but Brexit could cause the euro to take another negative turn.”
Markets outside of the US, UK, and EU are also bracing themselves for what’s to come.
For example, New Zealand is a major exporter of sheepmeat to the UK, while at the same time the UK exports its sheepmeat to the EU. If trade restrictions cause the UK to export less sheepmeat, there will, in turn, be less demand for imports from New Zealand.
Ireland is also concerned that tariffs and other restrictions will harm the trade relationship. Currently, Ireland exports more than half of its beef and 60% of its pork to the UK.
For South American exporters, on the other hand, Brexit may create huge opportunities. Brazilian officials expect the UK to adopt more flexible policies surrounding imports than it had under the EU, which could increase the market for the country’s beef. Argentina may also be poised to benefit.
At the moment, everything is pretty up in the air, and it will be for a while. Stay tuned for continuing coverage on Brexit and other news affecting the meat industry. To get a monthly wrap-up of industry news delivered straight to your inbox, sign up for our newsletter at the top of this page.