There are huge opportunities for UK dairy after leaving the EU but the industry must shape up in order to exploit them effectively.
That was a recurring theme in an AHDB-hosted seminar looking at post-Brexit prospects for the dairy industry at the UK Dairy Day in Telford on 13 September.
AHDB’s Head of Strategic Insight David Swales kicked off the event with analysis, published earlier this week, of UK dairy’s current trading position and where demand potential lies at a global level.
He said demand for dairy commodity products was a key growth area over the next decade, with a ‘phenomenal’ increase forecast in the Asia-Pacific region, fuelled by rapid expansion of the middle class.
But Mr Swales warned that to take advantage, UK industry would need to catch up with its global competitors with a targeted exports strategy and more competitive production base.
He said: “The key challenge for the whole industry is how we can become more competitive, improve efficiency, drive down costs and align supply chains effectively so we can take advantage of these opportunities.”
With the UK a massive net importer of dairy products, displacing some of these imports with domestic product was also identified as a big opportunity but requiring investment in processing capacity. Mr Swales said to draw investment into UK facilities, a demonstrably competitive, sustainable and resilient production base was critical.
Following Mr Swales’ presentation was a panel session chaired by AHDB market intelligence director Phil Bicknell, where he was joined by lead dairy analyst Chris Gooderham and Gail Soutar, chief EU exit and international trade adviser for the NFU.
During the session, Mr Swales revealed his team is currently working on a piece of analysis looking at the impact of three different post-Brexit policy scenarios on individual farm enterprises across seven agricultural and horticultural sectors.
He said: “A lot of the work we’ve done so far has been quite top level and farmers may question what it means for them – this report will be far more tangible and relatable for farmers.”
The scenario modelling will be published as a Horizon report at the AHDB Grain Market Outlook Conference on 11 October in London.
AHDB Board Member and dairy chair Gwyn Jones closed the event by saying dairy farmers should be looking to raise their game and that AHDB was there to help them do that, citing a new publication looking at delivering a more competitive industry through optimal dairy systems. The publication recommends that British dairy farms narrow production to one of two systems – block calving within a 12-week window or all year round calving – in order to achieve significant competitive gains at farm level.
