The dairy sector in Wales must not overlook the potential for growth in the domestic market, according to the Agriculture and Horticulture Development Board.
AHDB senior market analyst, Julie MacLeod, said although Brazil, Russia, India and China were predicted to drive demand for dairy in the next decade, the domestic market was still vital and had room to grow.
She told the inaugural DairyCo Welsh conference at Llanelli: “It is easy to get excited about growth opportunities worldwide, but between 2005 and 2011 we have seen growth in domestic markets.
“And this will accelerate, with the UK population forecast to grow by two million by 2025. We shouldn’t forget the domestic market and the opportunities there.”
Ian Browne, of the Farm Consultancy Group, said he believed the Welsh dairy industry was well placed to respond to demand.
Wales produces 1.5bn litres of the 13.5bn litres produced in the UK annually – equivalent to 11.5%.
“Welsh milk production is quietly growing,” said Mr Browne.
He said Wales, particularly the west of the principality, had some of the best grass-growing land in Europe, if not the world. The combination of an average rainfall of between 43-50 inches and winter soil temperatures of over 5C, gave it a natural advantage for producing milk from grass.
“Dairying is well suited to Wales. Grass is one of the cheapest feeds and Wales can grow it better than anywhere,” said Mr Browne.
He warned against establishing systems that require high feed inputs, which farmers had no control over. “Whatever the system, a dairy farm should always play on its strengths and produce more milk from grass,” he added.