Cheese air drying© Tim Scrivener

The UK dairy industry has invested more than €500m (£432m) in processing capacity in the past four years, the highest level among the six largest milk-producing nations in the EU.

Increased UK investment has been driven by the country’s two largest processors, Arla and Muller.

Research carried out by Promar on behalf of AHDB Dairy examined publicly announced investments from processors in the UK, Ireland, Germany, France, the Netherlands and Denmark.

Ireland however, leads the way in terms of investment on a volume basis, investing 1.2 euro cent/litre (1.0p/litre) over the three-year period between 2015-17 – with the UK second at 0.8 euro cent/litre (0.7p/litre) and almost double the EU average.

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The data showed a clear turnaround in investment emphasis with countries such as Ireland, the Netherlands and Denmark investing heavily in processing in the run up to the abolition of quotas in 2015.

 

These investments encouraged farmgate production increases in the respective countries of 29%, 15% and 7% in the period 2014-2017 – signalling the UK could be set to see production heading upwards in the coming years.

Over the slightly longer term, between 2011 and 2017 the UK sat just below the EU average for processor investments but increased expenditure in 2017 pulled the country above the likes of France and Germany into third. 

Substantial investment from processors following the 2016 Brexit referendum result, highlighting the intention to displace imports of products such as cheese, butter and yoghurt following the UK’s departure from the EU.