Truss trade deal effects felt by British farmers

Liz Truss allegedly used a private jet to fly to Australia to secure a trade deal there.  She certainly got a good selfie and displayed the union flag, but there were concerns at the time that the marginal gains from the deal were offset by the potential costs to British farmers.   These concerns are now becoming more real.

An influx of Australian steak into the UK is undercutting domestic beef production, British farmers have warned, as the livestock sector starts to feel the effects of post-Brexit trade deals. A sharp uptick in imports of prime Australian cuts such as strip loin and rib was eroding confidence in the livestock sector, the National Farmers’ Union and National Beef Association told the Financial Times.

“These high-value cuts have the most distorting impact upon the UK beef market,” said David Barton, NFU chair of the national livestock board, because they are sold at a lower price than British cuts. In the first five months of 2025 Australia exported 6,503 tonnes of beef to the UK, more than in the whole of 2024, according to the Australian Department of Agriculture, Fisheries and Forestry.

The uptick follows a free trade agreement struck between London and Canberra, which came into force in 2023 and gave Australia access to a duty-free quota of 35,000 tonnes. Australia had previously exported modest amounts of beef to the EU, including the UK, typically under a quota arrangement paying a 20 per cent tariff rate. Some 95 per cent of imports in the first two months of the year were made up of fresh and boneless, high-end cuts, according to analysis by the UK Agriculture and Horticulture Development Board, a levy board that supports farmers.

Neil Shand, National Beef Association chief executive, said: “We need imported product when we’re not self-sufficient. But what we don’t like is putting it on the shelf at a lower price than our product.” Industry confidence was at “rock bottom” because of current government policy, he added, referring to recent changes to inheritance tax rules for farmers and the reduction of farm subsidies.

The UK imported 5,515 tonnes of beef from Australia and 4,110 tonnes from New Zealand in 2024, according to data from HM Revenue & Customs. The figures represent increases of 534 per cent and 339 per cent, respectively, compared with 2022, before free trade agreements agreed with the countries entered into force.

While volumes have soared, Australia is still significantly under utilising its access to UK markets, shipping only 15 per cent of its 43,300 tonne quota in 2024, according to the AHDB. Under the trade agreement, the quota will increase each year, reaching 110,000 tonnes by 2033.    One has to remember that Australia has significant commercial markets in the Middle East and Asia.   I visited one very large dry lot beef farm in New South Wales which was producing just for the Japanese market.

Farming groups have been sounding the alarm after seeing more beef from overseas on the shelves of major UK supermarkets, despite retailers’ commitments to source exclusively British prime cuts. The majority of the recent imports from Australia were going into food service, the NFU said. “We’re disappointed that retailers have broken their promise,” Shand told the Pink ‘Un. The NFU, meanwhile, claimed that Australian beef was produced to a lower standard than British beef, citing stricter UK rules on how long live cows can be transported before they require rest time.

The Australians, meanwhile, are pleased with how things are turning out. The surge in high-quality beef sales to the UK has helped restore historic trade ties between Australia and the UK, according to Andrew Cox, general manager of international markets at Meat & Livestock Australia, an industry body. “Before 1973, the UK was our largest agricultural export market,” he said. “It’s a ready-made market.”

The writer should point out that he has made a number of farm visits in Australia and is grateful  for funding in the past from Defra and also for the cooperation and hospitality of the federal government, state governments, farm organisations and individual farmers who have offered me generous hospitality on their farms.

Cabinet row over Australian trade deal

A battle royal is in progress in Cabinet on whether Britain should agree a tariff free trade deal with Australia.  Brexiteers think that if a trade deal cannot be concluded with Australia no deals will be possible for the new 'Global Britain'.

However, farmers - already reeling from the phasing out of support payments - are concerned that it could hit their markets and be a precedent for future deals, particularly those with the US and New Zealand.

On one side of the argument is international trade secretary Liz Truss.   On the other side is Defra secretary of state George Eustice, backed up by Michael Gove.   Gove is concerned that rural areas in Wales and Scotland would be hard hit, further undermining the union.   Reports are suggesting that Boris Johnson may come down in favour of the deal.

Beef and sheep meat would be the main commodities affected, although Australia is also interested in exporting more cheese.   There is a 20 per cent tariff on beef at present which would be phased out over 15 years.   

Australian farmers benefit from greater economies of scale, allowing them to undercut on price.  The writer well remembers visiting a huge drylot beef farm in New South Wales.

The RSPCA said Australia had lower standards on chlorinated chickens, sow stalls that confine pregnant pigs and growth hormone treatment for beef.

Could Dom's deal be bad for UK farmers?

The Foreign Secretary, the Rt. Hon. Dominic Raab is visiting Australia today and tomorrow: Foreign Office statement

A free trade agreement with Australia has received much less attention than one with the United States in terms of its impact on agriculture, but it could actually be greater. My concerns in the past have focused on exports on lamb and cheese, but I may have been focusing on the wrong target.

According to Wake up to Money on Radio 5 this morning, Australia is interested in beef exports, including hormone reared beef (which concerns me more than chlorinated chicken, although that is bad enough).

The writer visits an irrigation area in New South Wales

This figures as some years ago I was given a study tour by the Department of Agriculture in Australia. We visited a huge dry lot beef farm where our guide kept referring to the 'beasts'. No doubt they were properly looked after, but I don't think animal welfare activists would like what I saw. The entire output was going to Japan, but some of it could easily be sent to the UK.

I also visited a wine production area which relied heavily on irrigation (with consequent impacts on the Murray-Darling system). Australia is also interested in more access for its wines and claims that that could costs by £1 a bottle.

Much Australian wine is at the cheap end of the market (I have crossed the famous 'Jacobs Creek') although I have had some excellent wines from the Margaret River area of Western Australia. There is probably no real threat to the developing UK industry (I should declare that I am investor in Chapel Down in Tenterden, Kent).

It's livestock producers that should be concerned.'

Incidentally, according to The Times yesterday the Foreign Secretary is known in Whitehall as 'Dim Dom'. I am sure this is unfair, but I also know how tough and well-informed Australian negotiators can be.