Dairy debate: Should UK milk be aimed outside the domestic market?

Global demand for dairy is booming and this is a good time to be in the dairy farming and processing industry, says Promar’s agri-food director, John Giles.

He says there are plenty of opportunities for the export of dairy products, rather than liquid milk, as demand grows in emerging markets such as Russia, Africa, India and China etc.

What’s more, within the European market, there is a demand for higher added-value dairy products. And in terms of the UK market, he says there is scope for producers to replace imports with UK-produced dairy products.

“We are largely self-sufficient in liquid milk, but there’s always an opportunity to replace imports with domestic products,” he adds.

He says British dairy producers and processors looking to tap into different markets need to research the market, identify their strengths and understand where their basis of competition exists.

“Producers need to work out where they fit in the supply chain first and know their competitive advantage – there’s no one single opportunity for the UK dairy industry and there are opportunities across the board for export, but these markets are fiercely competitive,” he adds.

FWi FORUM COMMENTS

No

“It’s madness to waste our scarce resources of time and money looking to export unbranded milk products in large quantities abroad into markets that either cannot afford our products or where others (notably Ireland and New Zealand) already have a leading market share. We need to capitalise on our good fortune that we farm in one of the most overcrowded countries in the world – with a population in excess of 60m people who can afford, in the main, to purchase our products. And yet, with the exception of liquid milk, we have a woefully small share of the marketplace for unbranded cheese, yoghurts, health drinks etc. That’s what needs addressing.” branstonfen

On the fence

“We need both – a keen domestic market and a strong export. The problem, however, is that the distribution of produce is controlled by a small number of retailers who have the power and size to dictate the price they will buy the milk/cheese et al at. The access to this mainstream market is completely limited, so the price is driven down further as the buyers essentially have a captive supplier. To mitigate against this and to ensure the price received is competitive we need to have open access to global markets; eg be able to reduce the amount of milk available to the retailers regaining some control over the price paid.” andyrobbo81

Yes

“I profoundly disagree with the point of view that we have some sort of duty to satisfy the local market over any other possible outlet. No other business thinks this way and one of the failings of Britain’s farmers is an inability to think outside the box. Doing the same things you’ve always done may not be the best use of the resources you have, and at the very least considering alternatives to run alongside can be productive, even if the conclusion is indeed to do nothing. I don’t normally praise government quangos, but I applaud the efforts of HCC in Wales to promote our lamb in places keen to buy our product at a time when the British housewife is counting the pennies.” Townie


TWITTER COMMENTS #dairydebate

@sandpark_rob Without doubt, it should be marketed to whoever is willing to pay the best price.

@frmstu Absolutely, the export of dairy is the best way to raise the farm gate price.

@WJMathias No, we should concentrate on achieving proper returns for dairy farmers from UK buyers before sending any abroad.

@farmer_charmer No, they should be aiming to supply the domestic market only and to the best of their capability.

@robertcraignfu Why not? If we have the product and compete in other markets, we must create and capture value where we can.

@cocklepark I can’t see anything wrong with the concept, as long as it’s market driven rather than used as a tool to dump excess production.

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