Dairy report identifies keys to industry success

Four of the dairy sector’s key players united at the Royal Show to launch a new report on the future of the milk sector.

Routes to Profitability 2: practical steps forward, was commissioned from the Milk Development Council by NFU Scotland and follows a report released last autumn  that examined whether cutting UK milk output would help boost farm-gate milk prices.

The answer to that was a resounding no and the study  identified three key elements – innovation, better supply-chain relationships and increased efficiency – that were vital for a successful industry.

In the latest report, each of these themes is expanded and everybody in the dairy supply chain urged to use rising commodity prices as an opportunity for long-term stability.

In an unprecedented joint statement, Jim Begg, director general of Dairy UK, NFU Scotland president Jim McLaren, NFU Dairy Board chairman Gwyn Jones and MDC chief executive Ken Boyns, collectively welcomed the report’s conclusions, especially the opportunities it identified to turn around the UK’s growing deficit in dairy products, which increased to almost £1bn last year.

All parties agreed that the recommendations for high levels of on-farm efficiency matched by similar measures from milk processors could create a platform for investing increased market returns in added-value products.

Mr Boyns said there was one clear message from the report – the need for producers, processors and retailers to focus on long-tern goals and make the most of these medium-term improvements in prices.

It was vital that farmers recognised the “unique” opportunity to change the industry so that it would be better equipped to face the future, agreed Mr Jones.

“The UK dairy industry has very good reasons to be optimistic,” said Mr Begg. However, he warned about concentrating development on one particular sector of the industry simply because it was performing well at the moment. “We must stay committed to the longer-term objective.”

Mr McLaren told Farmers Weekly that the industry ignored the messages in the report “at its peril.” He said it must make sure it was in a position where it was not reliant on the bottom end of the market. “Some producers are still getting below 16p/litre.”

To see the full report go to www.mdc.org.uk or call the MDC on 01285 646510.

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