One speaker will be John Allen, the founder of Kite Consulting, which are recognised consultancy specialists in the UK dairy sector. He now is leading the corporate and global business for the AB Dairy business and works along the dairy supply chain with some of the UK’s leading operators and has linkages with international processors via the International Farming Community Network (IFCN).

He will be discussing, “Challenging Cheese: Futureproofing our industry,” at 14:00 on 27 June in the Seminar Theatre, which is located among the exhibitors in the hall. He has been recognised with a number of awards for his contribution to the industry.

There is a lot of free parking at the showground and there will be thousands of visitors attending. It is also free to attend, so make sure you sign up and get to the Expo.

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Arla has also announced it will be looking to export more of its UK products overseas. Again, the British flag has a good reputation for export markets and let’s face it, if you can get a decent return for your products versus the domestic market, it makes sense to head west where the customers are.

A report by Kite Consulting also looks at this burgeoning export market, and suggests that it may be preferable to some domestic markets for some processors. The report, entitled Beyond Reset, builds on the analysis Kite conducted in October 2021, in its report Opportunities ahead, which outlined long-term global demand growth for dairy products. (www.kiteconsulting.com).

The report notes that this access to global markets is one that wasn’t an option in the past, and introduces a new dynamic in the sector, particularly for the liquid side of the business. It also suggests that using liquid milk as a loss leader for British retailers is not likely to remain viable.

John Allen, managing partner of Kite Consulting, adds: “If retailers want to secure long-term supply from partners that are committed to fulfilling their decarbonisation objectives, they need to provide a competitive market return. There has got to be a reset, prioritising fresh liquid milk and valuing it accordingly. UK farming become a potentially better place to be for the long term. Being out of the EU makes it a better place to export from, whether we wanted to leave or not. It created a situation and dynamic for the export business.”

• Suzanne Christiansen, editor, Dairy Industries International.
  Keep in touch via email: suzanne@bellpublishing.com
  Twitter: @dairyindustries or LinkedIn: Dairy Industries International magazine.

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The UK dairy industry is well placed to capitalise on the Government’s recently launched “Made in the UK, Sold to the World” campaign as global opportunities for dairy are growing significantly, and UK farmers are some of the most environmentally progressive and efficient in the world. All that is required is the political will and support to facilitate investment by processors and farmers to allow the industry to seize the opportunities available.

That is the conclusion of a new report – ‘Opportunities ahead’ – by Kite Consulting, and sponsored by NMR, into the export opportunities for dairy after Brexit.

The report assesses the dairy consumption potential of 90 dairy-importing countries with a population of nearly 5 billion people – two-thirds of the world’s population. It shows that between 2011 and 2019 dairy consumption in those countries increased from 258bn kgs to 304bn kgs – an increase broadly equivalent to the total milk production volume for New Zealand for two years.

Kite’s analysis indicates that those countries will probably require larger import volumes as the decade progresses, at a projected 5.6% per year from 2019 to 2025, which is equivalent to 3bn kg LME (liquid milk equivalent) per year. Much of that will be in milk powders and cheese.

Additionally, evidence shows that local dairy production in the importing countries will not satisfy the increase in demand, as typically self-sufficiency decreases as economic development increases.

A further report – ‘EU Agricultural Policy’ – prepared by Hayley Campbell-Gibbons on behalf of Kite, indicates that the EU dairy industry is likely to decline over the next 6 years – by as much as 6.3% – because of the implementation of the EU’s Green Deal and the resulting updates to the Common Agricultural Policy.

Commenting on the reports, John Allen, managing partner at Kite Consulting, said: “What our analysis shows is that there is a growing opportunity for dairy exports coming at the same time as anticipated decline in the EU dairy industry. This is a huge opportunity for UK dairy and it is likely that UK processors will continue to grow exports to capitalise on these growth opportunities. This will probably put significant inflationary pressure on domestic dairy prices, as recent history shows that many dairy export markets can be more profitable than domestic ones. Indeed, we are already seeing this happening, with many dairy processors undertaking investment in the UK to allow them to access growth markets overseas.

“What’s exciting is that the UK dairy industry is well-placed to take advantage of this significant growth opportunity,” John added. “Our producers are already some of the most environmentally-efficient*, responsible and forward-thinking in the world. Most UK processors have already set net zero targets and are making good progress on decarbonising dairy, whilst further improving our already leading standards of animal welfare. With the required support, dairy can bring global wealth back into the UK’s rural communities, whilst at the same time driving forward an agenda focused on planet-friendly food production.”

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He says dairy has increased because of consumers looking after themselves more during lockdown and spending increasing time at home. “Cheese consumption has risen by 15.7% with more people eating cheese at lunch. Yoghurt sales have risen by 4.1% and butter by 16.1%, particularly block butter sales, due to more people home baking.”

Rob Hutchinson, operations director for Müller, says they had seen strong retail sales during the pandemic. “Cereal consumption is up 8%, which is good for milk sales. The challenge now is to maintain the level of consumption as we come out of lockdown,” he adds.

The panellists, which also included journalist and commentator Chris Walkland and chair John Allen from Kite Consulting, said they were optimistic about the UK dairy industry.

Hutchinson says, “I’m cautiously optimistic about the market outlook. The markets recovered after March last year and the global stock position is lower than we expected coming into this year, which is a good position to be in.”

The exception is cream, which is seeing a big mismatch in the price compared to the EU. This is largely because of Brexit and the extra export health certificates that are now required when exporting fresh products, like cream. Hutchinson adds, “We hope to see the situation improve as there’s no doubt this is having an impact on the cream price.”

Walkland said the outlook was good to firm for most commodities. “Cheddar is firm, mozzarella is firming, butter is good, and powders are okay, but cream is struggling. There are reasons to be optimistic on price, but sober on margins,” he adds.

Dairy-Tech Online is an online event running until 17 February. To view the programme of activity and to register for free go to dairy-tech.uk. You can rewatch the sessions by clicking the ‘rewatch’ tab on the Dairy-Tech website.

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