UK MILK producers must realise that countries such as Australia who are producing milk for the equivalent of 13.6p/litre are in the same marketplace for dairy commodities.

That was the message from Jim Begg, of Dairy UK and newly elected president of the International Dairy Federation, to delegates via live video link from Australia.

He added that as the World Trade Organisation deal starts to role out, the trade protection the UK currently enjoys will reduce.

All parts of the industry must, therefore, continue to achieve efficiency gains, he said. “UK processors have been undertaking a sustained programme of rationalisation.

“This has improved industry efficiency and concentration, by increasing their involvement in added value and branded markets.” Such products make it easier for the industry to respond to cost pressures.

But, as an industry, milk producers need to be more active in organisations worldwide which can influence the market, to be aware of where the competition and opportunities lie, he suggested. “There is an economic value to be sought from this.”

Individual farm businesses will also need to develop, within existing constraints, for a successful future. “In today’s marketing climate no one can afford to stay still. Producers have to be focussed on cost reduction, as well as maintaining a grasp on competition.