Maize imports to the UK from the US will no longer face a 25% import tax from 1 June.
The removal of tariffs should help to reduce rising on-farm feed costs and replace a reduced supply from Ukraine. However, with a tight global maize supply, no big price reductions appear likely.
Typically, 27% of the UK’s maize imports come from Ukraine, according to the Agricultural Industries Confederation (AIC). Maize is a key feed ingredient for dairy and is also used in pig and poultry feed.
See also: How ‘chemichanical’ approach is aiding maize production
The 25% retaliatory tariff was put in place in response to US tariffs being imposed on UK steel exports in 2018. No maize has been imported from the US to the UK since the tariffs were applied.
James McCulloch, head of feed sector at AIC, said the UK was looking for alternative sources of maize to replace imports from Ukraine, and the US was one of the viable markets.
Mr McCulloch said: “We would normally be buying 700,000t of maize from Ukraine, so we need to find alternative sources for that. US Department of Agriculture figures show that the US is holding stock of about 50m tonnes of maize, so should be in a position to supply.”
The Netherlands, Portugal, and Italy have reportedly already agreed shipments of US maize following the removal of the 25% EU tariff on US maize on 1 January, after the EU and the US reached agreement.
However, talks with the UK began only in January. The deal means UK retaliatory tariffs on US bourbon whisky, agricultural and other goods will be lifted from June 1.
Maize markets
On March 24 Chicago maize futures for May 2022 closed at $294.59/t (£223.50/t).
Millie Askew, a senior analyst at AHDB, said maize has fallen out of favour this season with animal feed producers because of its price compared with wheat. Maize imports this season are forecast at 2m tonnes, down 31% from 2020-21 levels.
Ms Askew said: “Domestic consumption is also expected to fall on the year, driven by higher prices. With Ukraine taken out of the equation, the global supply of maize is very tight. However, if tensions subside in Ukraine, as well as a suspension of the US maize tariff as of 1 June, we could see more maize available.”
Industry views
Kristian Dunham, head of livestock inputs at agricultural purchasing co-op AF Group, suggests that while scrapping the tariff is good news, the actual effect on UK prices will be relatively small.
Simply importing from the US instead of Ukraine will not change global demand, according to Mr Dunham, as production is finite. However, he believes if the situation in Ukraine does ease, and we start to see exports resume, then prices could fall.
“Unfortunately, escalation seems more likely at the moment. Of course, any easing in current markets will be welcomed on farm, and this news will ease markets, but personally I can’t see prices falling by more than 5%,” he said.
Ed Barker, head of policy at AIC, welcomed the move and suggested the government must be prepared to take quick action to ensure the continued supply of inputs to UK agriculture, such as animal feed.
Mr Barker said: “The decision to lift it will help to mitigate the now limited maize exports coming from Ukraine and Russia and will improve the ability of the agri-supply chain to maintain a continued supply of animal feed to UK farmers. This will be welcomed by AIC members and UK livestock farmers.
“However, there will continue to be challenges arising from the war in Ukraine that will have negative impacts on the wider agri-supply chain. Government must work closely with the agri-supply industry to find appropriate resolutions. No policy or legislative responses should be considered off the table.”
