I have just returned from an intensive, week-long study tour of the beef industry in Brazil and Paraguay in the company of SNP MEP Alyn Smith and two others from Brussels.

The trip was prompted by the imminent trade discussions between the EU and Mercosur, a trading bloc of South American countries.

Currently Mercosur is not pulling together as a result of internal disputes, and those discussions may not go anywhere – but, it is looking increasingly likely that the EU will go ahead with discussions on a separate trade deal concerning the EU and Brazil.

Loading article content

Scotland, and Scottish beef producers in particular, are expected to be disproportionately hit by such a deal.

A recent study on the impact of a trade deal between the EU and Mercosur revealed that could lead to an increase of 524,000 tonnes of beef imports from South America, most of which would come from Brazil.

The different scenarios propose a range of possibilities from the fall in domestic agricultural production, from 2.17% to 6.81%, with beef revenue down by a range of values from 7.61% to 18% in the worst case.

Agricultural revenue as a whole could fall by 7.1% if there is a Mercosur and Doha deal – which would make Scotland the 7th worst hit in the EU.

Not surprisingly, the Brazilians were very wary of our presence.

We were accompanied by a former state vet who acted as our translator, another state vet who was his former boss, as well as a vet who worked for FAMASUL, Brazil's equivalent of the NFU, and another employee who worked in PR.

Despite that, we travelled widely and managed to see a wide range of beef-ranching systems, a massive feedlot fattening 150,000 head of cattle annually, and an open inspection of one of their top abattoirs that had the capacity to slaughter and butcher 2100 cattle per day.

We also met with senior officials of FAMASUL and ACRISSUL – their equivalent of our National Beef Association.

We concluded that Brazil had a comparative economic advantage over Europe in beef production.

While their traceability systems were not as robust as the EU's, they had many ranches complying with the requirements stipulated by EU vets and many more capable of complying if there was an increased incentive due to reduced tariffs.

So Europe, and Scotland in particular, had better brace themselves for increased imports of beef from Brazil – there'll be more of that in my Farmer's Diary.

John Swan Ltd sold 39 prime bullocks in St Boswells yesterday to average 208.5p per kg (+0.3p on the week), while 39 prime heifers levelled at 208.3p (-0.3p). In the rough ring 94 beef-type OTM cattle averaged 124.7p (+1.3p).

There were also 1708 prime lambs that averaged 161.3p (10.7p), while 513 cast sheep levelled at £46.24 (n/c).