On April 30, the United Kingdom's red meat import market took its next step away from the European Union with the implementation of their new Border Target Operating Model for non EU countries like Australia.
Australian red meat products have been risk assessed by the UK and will have reduced frequency of checks at the border depending on their risk category.
The lowest risk category which includes Australian sheep and goat meat will no longer require health certification or routine physical border checks, a cost and logistics saving.
Australian beef has been classified as medium risk and will still need a health certificate.
Irrespective of the risk category, the Department of Agriculture will continue to issue quota certificates for the UK as nearly all red meat shipments still enter the UK under the four Australian specific beef and sheepmeat import quota schemes in place - two as a result of the free trade agreement with the UK and two as a result of previous quota agreements under the World Trade Organisation.
We are now in year two of the A-UKFTA and there is over 43,890 tonnes of Australian sheepmeat access available to the UK in 2024 and over 43,300 tonnes of beef quota access - all at zero import duty.
In the first quarter of 2024, around 20 per cent of the sheepmeat quota has been used but only 4pc of the beef.
Most traders agree that while EUCAS (the European Union Cattle Assurance System) remains the process by which hormone growth promotant free cattle are selected for the UK, the current quota beef access under the A-UKFTA will not be used.
The EUCAS system is particularly limiting on new entrants to the UK who have no previous history of accessing EUCAS cattle.
Traditional exporters to the UK are in a stronger position here as the quota utilisation data shows.
The EUCAS system is over 25 years old and a hangover from the negotiations a quarter of a century ago to maintain access to the EU.
The UK has the opportunity to implement a more efficient and less costly system similar to those currently servicing the Chinese market.
A UK delegation was in Australia last year reviewing the more modern HGP-free systems available. The feedback was positive but there has been no official advice since.
With a UK election later this year and the incumbent government behind in the polls, there is already a lot of pressure from the UK red meat sector that is very critical of the A-UKFTA.
Part of that critique includes the recent widely-circulated report by the Anderson Centre, a business management consultant in the UK.
In their report to the Irish Farmers Journal Spring Conference, they said that UK beef and sheep producers were the most affected by the new post-Brexit trade deals with Australia and New Zealand.
The report identified that UK producers, in competing against "lower-cost" imports from Australia and NZ, would face a drop in economic output from the UK sheep sector of between 10.5 and 11pc and between 2.8 and 6.1pc for beef producers.
The Agriculture and Horticulture Development Board of the UK published last week another report that compares the UK's Red Tractor Farm Assurance and Food Standards system with Australia's Livestock Production Assurance system.
The independent study suggested Red Tractor standards were "higher in all areas except biosecurity and disease control."
It said the research raised concerns that "lower farm standards in Australia could be giving them an unfair commercial advantage."
Red Tractor CEO Jim Mosely argues the program is a key reason why many UK supermarkets pursue British-first sourcing strategies in their fresh meat ranges rather than imports.
The UK sheep flock however has seen a drop of over 5pc year-on-year to 21.2 million head with the contraction in the female breeding flock accounting for most of that fall - down to some of the lowest numbers on record.
Reduced UK lamb production is expected in 2024.
UK cattle numbers have similarly declined by 1.8pc.
Inflation in the UK has fallen to its lowest level in two and half years largely driven by slowing food price rises although consumers are unlikely to notice this in their pockets in what remains weak economic growth.
Shipping delays because of the terrorist problems in the Red Sea have had an impact on the shelf life of chilled shipments but most report they have adjusted to the longer shipping times and costs involved and have factored that into their marketing strategies.
The long term potential in the UK remains.
On beef it is not delivering at present the return required to attract product away from other markets.
Local market
National cattle slaughter returned to peak levels after the Easter short kill weeks and has settled around the 130,000 head mark with female slaughter making up 48.9pc last week.
Cattle slaughter is up 37pc on this time last year. Cattle prices saw a correction in the run up to the short kill ANZAC day week with more cautious processor interest although not from restockers and feeders.
With further short kill weeks to affect some processors over coming weeks, stabilising weather patterns may still encourage increased marketings for slaughter. This may add to an expectation of softer trends on processor grids with producer concerns that supply and demand may get out of balance.
For sheep and lambs, last week was the second largest national weekly slaughter on record. Lamb exports are up 22pc for the first quarter and heading for another record year.
