Fall in prices of milk, grain and cattle to hit farmers as sterling drops
Farmers will feel the after-effects of Brexit as early as this summer as cattle prices, milk prices and grain prices are set to fall, a leading agricultural economist has warned.
Kevin Hanrahan, Teagasc economist, says the most immediate consequence of Brexit will be the drop in value of sterling.
"It hasn't bounced back immediately and that makes Irish exports to the UK less competitive and makes British food exported to Ireland more competitive, in so far as competing with Irish goods in Irish shops," he said.
"It will lead almost certainly to lower cattle, milk and grain prices this summer - lower all around in just about everything."
Over the medium to longer term, Dr Hanrahan says the impact on trade into the UK is likely to be negative.
However, the magnitude of that negativity will depend on the outcome of EU negotiations.
Although farming organisations are attempting to reassure farmers that there will be "no immediate impact" on the day-to-day business of farmers, they are calling for the protection of the country's current free trade agreement with the UK.
Dr Hanrahan says it's "highly unlikely" that the UK will get any sort of special treatment with the EU without free movement of labour.
At the very minimum, Dr Hanrahan, who co-wrote a report on the impact of Brexit on Irish agriculture and food last April, says there will be extra costs on doing business. "Custom forms will have to be filled out. We've never even had to think about them before because of the single market, so Irish businesses have to start preparing for that. It's going to drive up costs," he said.
He says taxes on trade will also add to the price wedge; however, they won't be imposed until after the UK formally exits, which could take a number of years.
"If the UK falls back into recession, it could definitely lead to lower levels of growth in Ireland as compared to the world without Brexit," he said. "This outcome will affect many, many things that we can't even imagine."