New export markets offer support for UK dairy industry

A focus on UK dairy exports could prove essential in delivering new opportunities for the sector, according to speakers at the 2023 Semex conference in Glasgow on Monday 16 January.

Dairy exports are estimated to be worth about £1.4bn each year to the sector and, with a bearish outlook for milk prices and further price cuts expected, new export deals could offer some support to the marketplace.

The global dairy market is forecast to be growing at about 2% a year, according to industry estimates. However, only a small volume of UK milk goes into value added export products.

See also: Milk shortages predicted if farmgate prices plunge

Demand for dairy globally is growing and is being driven by the Middle East, Africa and Asia, according to Peter Giortz-Carlsen, executive vice president at Arla Foods.

Mr Giortz-Carlsen said the Chinese market is also reopening and will be a new driver of demand in 2023, following lockdowns for most of 2022.

With the EU remaining the largest single market for UK dairy exports, the long-term implementation of a free-trade agreement between the EU and the UK should be the number one priority, he added.

Industry support

AHDB chairman Nicholas Saphir suggested that we don’t have enough people focusing on exports in the UK. The industry needs to provide better information, advice and practical support for businesses to export, he said.

“We have to increase market access, we have to increase exports, and we have to encourage more businesses to take up the export challenge,” said Mr Saphir.

“New market development has very significant opportunities, particularly in the Far East and surprisingly the east and west coasts of America,” he said.

Targets

Back in 2021, the NFU set a target of doubling UK dairy exports in the next decade.

NFU president Minette Batters said: “We are going to need to be exporting a lot more and there are huge opportunities for the dairy sector on the back of it.”

The NFU is now working with other industry bodies in partnership with the Department for International Trade to establish a dairy export taskforce to help drive growth.

“This is very much the start and we need to bring everybody into this if we are going to drive ambition and open up these new market opportunities,” said Mrs Batters.

She added that scrutiny and transparency in new trade agreements are fundamental as a possible deal with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) moves closer.

“Canada will be very offensive on dairy and accessing [the UK] market, and will be very defensive on the UK entering the Canadian market,” she predicted.