Sheep exports could be wiped out if a no deal Brexit goes ahead, with beef exports faring not much better, according to a new report.

The report, commissioned by the Agriculture and Horticulture Development Board (AHDB), Quality Meat Scotland, Meat Promotion Wales, and conducted by the Andersons Centre, showed that should Britain leave the EU with a meaningful Free Trade Agreement (FTA), only a slight decrease in red meat exports was predicted (1.1 per cent). This was due to the non-tariff measures adding inefficiencies to just-in-time supply chains.

In this deal, the UK would be still outside the Single Market but able to operate within a comprehensive FTA and a customs arrangement, which meant trade between the UK and EU remained tariff free.

In the case of a no deal however, the report predicted that there would be “stark” ramifications for both sectors.

It stated that combined beef and sheepmeat exports to the EU would decline by 92.5 per cent, with sheepmeat export trade (-99.7 per cent) almost completely wiped out. Substantial declines in trade were also projected for beef with exports down by 87 per cent and imports declining by 92 per cent.

Whilst declines would be small in a Brexit deal, the threat of more severe price declines increased under a no deal Brexit with the overall impact on the value of domestically produced meat expected to be -4 per cent for beef and -31 per cent for sheepmeat.

At farm level, a profitability fall from £93 per hectare to £68 per hectare in a deal scenario was predicted and -£45 per hectare in the event of no deal.

Sarah Baker, AHDB strategic insight manager, said: “The analysis is a representation of reality and assumes farmers take no action in response to the price changes. In reality, they will adapt and some trade will continue, but the potential impact will be nonetheless substantial for the sheep sector.

“Importantly, the recommendations in the report give us a basis for discussion with the industry and will feed into to our strategic direction for the future.”

In response to its findings, the report called for the UK and EU to reach a mutual agreement which would minimise trade friction.

Suggested measures included creating a fast-track or lighter-touch Authorised Economic Operator system to help businesses overcome some customs measures; implementation of an e-certification system and better communication between UK and overseas regulatory authorities about procedures.