Market report: Reliance on dairy imports increases

The UK’s reliance on imported dairy products increased last year after the dairy trade balance recorded another record deficit.

Dairy exports fell by £70m to just £724m, with imports pegged at £1.99bn, according to Customs & Excise data. That put the trade deficit at £1.266bn – an increase of 5.7%, year-on-year.

“The UK dairy trade balance has been negative for at least 20 years and was three-times as high in 2009 as it was 10 years ago,” said DairyCo’s latest report. It blamed a combination of falling milk production, which in 2009/10 reached its lowest level for more than three decades, and an increase in the consumption of dairy products in the UK.

“Unless milk production starts rising again in line with demand, this deficit is likely to continue to grow in the future.”

Milk deliveries in June were the highest for four years, at 1.178bn litres, with cumulative production for the year-to-date 2% higher than last year. However, dry weather and fragile confidence continue to threaten future production.