UK dairy export volume exceeds import level for first time

Dairy product exports have outstripped imports for the first time since records began, according to the AHDB.

Figures released by HMRC show that the UK dairy trade balance – exports minus imports – was positive, in volume terms, at 95,000 tonnes during 2019.

It is the first overall UK trade volume surplus since records started in 1997, said AHDB Dairy analyst Katherine Jack.

See also: Study reveals what a farm manager is worth

Trade balance volume

Of the product types, the largest shift in trade balances was seen in skim milk powder (SMP). The category recorded a positive balance of 55,000t in 2019 – almost double the 30,000t surplus of a year earlier.

Ms Jack said that the marked improvement in the trade balance for skim milk was a direct result of a shift in trade patterns across the Irish border.

“In 2019, exports of skim milk to Ireland increased by 20,000t while imports to the republic fell by nearly 59,000t,” she explained.

The overall powder trade surplus also increased, with the figure for whole milk powder (WMP) up by 5,000t to a record 45,000t for the year.

“For buttermilk, there was a small increase in exports, but the main reason for the improved trade balance was a significant drop in imports of 103,000 tonnes,” Ms Jack said.

“[Reduced] shipments from France, Belgium and Germany accounted for most of the drop,” she added.

The shift in the cream trade balance from a deficit of 6,000t in 2018 to a surplus of 5,000t last year was due to both higher exports and lower imports.

A year of strong milk production and high butterfat levels supported this, said Ms Jack.

Cheese, yoghurt and butter still traded at a deficit.

The deficit was reduced for butter – down from -22,000t in 2018 to -9,000t last year – as imports fell and exports rose.

For cheese the deficit fell from -332,000t to -327,000t in 2019 as imports declined.

Trade balance value

In value terms, there was still a yawning dairy trade deficit in 2019 of more than £1bn (-£1.09bn).

However, the deficit was significantly smaller in 2019 compared with a year earlier, Ms Jack pointed out.

The overall deficit at £1.09bn was £167m down on the previous 12 months, as export values increased and import values shrank.

Butter and cream were the strongest performers.

Cream almost reversed a deficit of -£13m in 2018 to record a trade value surplus of £12m in 2019.

Butter products saw the most notable change, with a reduced trade value deficit of -£87m in 2018 down to -£31m last year.

“This is partly because we imported less butter in 2019, but also because lower prices meant the volume deficit was worth less overall,” Ms Jack said.


Support for farmers facing 2021 challenges

Register now

Online grain trading made easy with Farmers Weekly Graindex

It takes just a couple of minutes to create a listing on Farmers Weekly Graindex and you’ll get a range of prices to compare from active buyers who want your grain.
Visit Farmers Weekly Graindex