Farmers’ Union of Wales (FUW) president Glyn Roberts has described Brexit and a free trade agreement with New Zealand as a “perfect storm” about to land.
He said he was concerned about the threat from a direct competitor such as New Zealand.
At present New Zealand has a quota to export 228,000 tonnes of sheepmeat to the EU, protected under World Trade Organisation rules, although only 75 per cent of it is filled.
About 45 per cent of this is sold in the United Kingdom.
Beef+Lamb New Zealand chairman James Parsons dismissed the Welsh fears.
“If we were going to flood the EU with lamb we would have done it already, but as it is we don’t fill our quota.
“I can understand their concern about losing their market access to the EU, but that’s still up for negotiation,” Parsons said.
Parsons said the UK could not supply itself with lamb 52 weeks of the year.
“So it works out well to have the counter-seasonal relationship with New Zealand.
“They go on about how New Zealand undercuts their prices, and it’s true that in our peak season UK buyers will get a cheaper product out of New Zealand, but in their peak season they get cheaper product out of the UK.”
Roberts said the opportunities represented by a deal with New Zealand were “negligible”.
“New Zealand has a population of around 4.5 million, which is about one percent of the size of the EU, and is 11,500 miles away.
“A free trade deal may be a great opportunity for New Zealand, but the benefits for the UK as a whole are zero, and for agriculture are extremely negative.”
Roberts said he was concerned that the deal was being proposed for reasons of political expediency, and that gaining a market of 4.5 million consumers on the other side of the planet could not make up for the loss of a 500 million consumer market on Wales doorstep.
Welsh lamb could not compete with New Zealand lamb on price, but it could match it on value because it was a “premium product”.
“It depends on what the consumers want: does the consumer want cheap food or does the consumer feel that by buying Welsh products and Welsh lamb, that they are getting a premium product,” he told BBC Wales.
New Zealand Meat Industry Association chief executive Tim Ritchie argued that New Zealand lamb was also a premium product.
He agreed there was competition between NZ and Welsh lamb at the shoulders of the season but by having NZ lamb, UK consumers had a year-round supply.
Parsons said up until now British farmers had been able to rely on the EU to buy their lamb, but in future the terms of Brexit might mean they would need to look further and trade with Middle Eastern or Asian countries.
FUW said a third of Wales’ population lived in rural areas where farming, and businesses which rely on agriculture, play an important role in local economies.
Under the EU Common Agricultural Policy, Wales receives $432 million a year in direct payments to farmers. In 2014, half of Welsh farmers made a loss or would have done so that year without them.