UK trade plan threatens Irish dairy exporters
Farmers, milk purchasers, and processors have presented a strategy to farm minister George Eustice in London on how to seize the opportunity presented by growing global demand for dairy products.
They say the UK could become a net dairy exporter by producing 4bn extra litres of milk, through yield improvements and adding at least half a million more cows.
At the moment, the UK imports more dairy products than it produces every year, with an annual deficit of about €1.5bn.
From Ireland alone it imports dairy products worth about €960m annually. More than one third of our dairy exports go to the UK — so the new expansion plan puts the UK industry on a “collision course” with Ireland’s target to expand milk production after Mar 2015 by 50% within five years.
The plan has been devised by Dairy UK (representing farmers, milk purchasers, and processors); DairyCo, a levy-funded organisation working on behalf of dairy farmers; and the National Farmers Union.
One strategy suggested is to produce the additional 5.1bn litres of milk needed to balance trade in cheddar, butter and skimmed milk powder, by adding 665,000 extra cows. Or the 287,000t of cheese and 66,300t of butter imported into the UK could be displaced by producing an additional 4.3bn litres of milk, requiring an extra 560,000 cows.
Even though the number of UK dairy farmers has been declining, NFU dairy spokesman Rob Newbery said farmers are well placed to respond to this challenge, given the right signals from the marketplace. He said, “If we fail to invest, we will lose even more of our own market.”
Dairy UK chief executive Judith Bryans said, “The British dairy industry is well placed to take advantage of this opportunity, we have fantastic natural resources, a well-established farm infrastructure and the makings of world class processing capacity. We need to be competitive at farm level with our international competitors because this will improve the margins on the farm and will encourage processors to invest in British milk fields.
The dairy plan is in line with British Government aims to improve the balance of payment. If it gets off the ground and succeeds, Ireland’s cheese exporters will come under particularly severe pressure.
