NSA Breakfast Club - Riding a wave: A morning analysis of current domestic and international lamb trade

Below is a report on the contents of this webinar. To watch the webinar on demand please visit www.nationalsheep.org.uk/webinars/.

Changes to trade experienced since the UK exited the EU at the start of 2021, have been widely reported. Those involved in the livestock industry are aware of the initial teething problems, some hopefully behind us now, but there are still reports of delays in exporting products to the EU, excessive bureaucracy, increased labour needs (and labour shortages), shortages of haulage and drivers, and some customers have just gone elsewhere for an easier life.

While the volumes of exported lamb to the EU have decreased the prices have remained steadfast through the 5 months that the UK has been trading as a single entity – and there has been some growth in export volumes to non-EU countries. The domestic market has been strong – in part because of covid impacted supply chains but also as a result of effective promotional activities. Indications are that with lower volumes likely to come forward, and global demand being strong, prices are expected to remain at a good level.

The NSA Breakfast Club webinar on the 7^th July provided one of the largest audiences this year with an insightful update on both the domestic and international lamb trade since the turn of the year, and allowed for encouraging discussion on what the future might hold and how the industry can rise to meet the market needs.

Caryl Hughes, NSA Region Cymru/Wales, Vice Chair, introducing the webinar topic, the lamb trade and the current prices being achieved, a subject very close to her heart, welcomed the speakers and audience to what promised to be an engaging session, with many questions to be expected to fuel the discussion.

Peter Hardwick, Trade Policy Advisor at The British Meat Processors Association (BMPA), with 40 years’ experience in meat production, processing and international trade, firstly made the point of there being two impacts on the meat trade, Brexit and Covid 19, and how it is important to note that is not easy to separate them in terms of significance. However, the increased trade friction that has come about as a result of Brexit has led to a doubling in the end-to-end costs of exporting. Peter went on to describe how the various impacts have contributed to an estimated 20% loss in trade, but how availability has also played a role, and some exporters reporting how they could sell more if there was more to sell, which has to be encouraging. Going on to describe how the changes to Basic Payments and increased Trade Deals will describe the future for input costs and contribute to market prices, Peter commented on how that reflects demands on the market but also the need for negotiators to minimise the impact of imports domestically. In his concluding remarks, he remains positive, but stressed the urgent need for reducing the trade friction with the EU.

Norman Bagley, Head of Policy at The Association of Independent Meat Suppliers (AIMS) and with more than 50 years in the industry, went on to describe the context around prices and how, as a result of Brexit, there were fears of a price drop, and how due to global demand and the upward pressure on the value of red meat, that had not fully materialised. Also drawing attention to how domestic consumers have been prepared to pay premium prices and how domestic consumption has stayed strong, the question now being how to maintain this. He also mentioned how the catering butchery sector have had to adapt to the changing situation and in some way reinvent themselves to engage more directly with the consumer, which many have done very successfully.

Lesley Cameron, Marketing and Communications Director at QMS, with over 20 years experience within the food and drinks industry, gave a quick overview of some of the marketing statistics for the sector, indicating a category value up by 18% compared to previous year, driven by new customers and a strong Easter, with growth in supermarkets as well as in local butchers. Lesley carried on with an overview of the marketing activities that the levy bodies have been doing, presenting results from the Make It Lamb campaign which reached 74% of GB households generating significant revenue, and also a view of the Make it Cred summer campaign.

Alan Clarke, QMS CEO, with a background in retail and baking spanning more than 30 years, spoke on the joint activities and collaboration across the respective levy boards, using the Make It campaign as really good example of how the bodies work together domestically, as well as the close collaboration promoting British lamb to international markets. While the international trade events have not taken place this year, due to Covid 19, he outline how work is ongoing collectively to prepare for 2022 when it is hoped that these events will return. Additionally how the bodies are working together to prepare for the various summits this year, such as COP26.

Following the presentations a lively discussion was had covering topics including trade deals and negotiations, the dynamics of the domestic meat trade with an increase in direct-to-consumer supply, meat specifications and what is a required to meet different consumer demands, the influence a change from BPS to payments linked to environment schemes, if taken up, may or may not have and on the growing Halal market.