Over the past week, the time until Brexit takes effect has become less than the time that has passed since the vote took place. At 11pm on Tuesday night this week, the point was reached when 500 days are left until the UK leaves the EU, and at that point 510 days had passed since the referendum on 23 June 2016, when the UK voted by 52%-to-48% to leave.

Despite there being fewer than 500 days left, little substantial progress has been made in discussions between the EU and UK on how business will be done between the two trading blocs after 11pm on 29 March 2019, when the UK will formally leave the EU.

So far discussions have yielded little progress. They got off to a slow start following the triggering of Article 50 at the end of March by Prime Minister Theresa May. Almost immediately after this event, she called a surprise general election. With a huge opinion poll lead, a large Government majority was expected, but a long six-week campaign had the opposite effect, with the Prime Minister coming back without a majority in Parliament.

It was 19 June before formal negotiations began between the EU and UK, and since then six rounds have been completed. So far discussions have been concentrated on what the UK has to do to close the relationship with the EU before negotiations on a future trading relationship commence.

It is now hoped that sufficient progress will have been made to allow discussions to move on to the next phase, after the December meeting of EU heads of state. The EU lead negotiator wants negotiations wrapped up by October 2018, so there is sufficient time for the EU institutions to debate and vote on whatever deal is presented at that point.

Positive impact for farmers

For Scottish farmers – and indeed farmers across the UK – the vote to leave the EU gave a boost to trade in beef, though lamb endured an up-and-down second half of 2016. Beef prices had been on an upward trend at the time of the vote. Cattle average was £3.43/kg then, and continued rising until a peak of £3.79 at the beginning of October 2016. After a dip, stretching into this year, prices resumed their increase, reaching £3.93/kg in August 2017.

Lamb prices were up and down in the second half of 2016 and into this year. However, they shot up in May and into June, reaching £5.09/kg, before turning down again later in the summer and were trading at £3.85/kg by the end of October 2017.

The other big win for Scottish farmers has been the weakening of sterling after the vote, which has meant that the CAP payment that is issued in euros was worth £1.12 = €1 in September 2017, compared with £1.37 = €1 in October 2015.

In the context of sterling weakening, it has been all positive for Scottish farmers – but risks do lie ahead.

The greatest threat comes from a situation when no trading arrangement is arrived at in negotiations, which means that trade has to be conducted on World Trading Organisation (WTO) rules. These provide for particularly draconian tariffs on beef, sheepmeat and cheese.

Of these, while beef exports would be frustrated and the value of the carcase not maximised, it is the sheepmeat sector that would really take the hit. Under WTO tariff rates, it simply wouldn’t be viable for the UK to export sheepmeat to the EU in anywhere close to the volumes that go at present.

Another point to note that in trading under WTO rules, the UK has the option to set its tariff levels at whatever level it decides, but this becomes available to any WTO country. This would effectively open up the UK market to Mercosur imports and largely displace Irish as the supplier of the imported segment.

Scotch and Red Tractor beef would still command a premium in the marketplace, but that premium would be on top of a lower base if the imported beef is coming from lower-cost producing areas of the world.