News Brexit
British dairy market faces disruption
In recent decades, mainland Europe has played an important role in the British dairy market. When there was a surplus of fresh dairy, it was exported to the mainland, so that prices did not come under pressure. Now that Brexit is approaching, that will change, according to an analysis by the AHDB.
According to the Agriculture and Horticulture Development Board (AHDB), the UK dairy market will be severely disrupted after Brexit regardless of what deal is struck between the EU and the UK. Trading the dairy surplus to the EU will in fact become considerably more difficult. Because the United Kingdom has detached itself from the European Union, it no longer benefits from certain trade conveniences.
Administrative Requirements
It is clear that the dairy market has to absorb blows. Once Brexit is done, the UK will become a third trading country. This means that when trading products, a lot of additional administrative requirements are involved, such as customs declarations, border controls and a health certificate (EHC) must be issued for products of animal origin such as dairy.
According to the AHDB, this mainly leads to problems in the markets for fresh dairy products such as bulk cream and skimmed milk concentrate. When there is a lack of processing capacity to convert the products into butter and powder, the raw materials are sold on the European market. As a result, the domestic markets remain relatively well balanced. If an EHC has to be applied for in the future, this will entail extra costs and time, which is a problem for fresh products.
Alternatives
For cream there is the possibility to process this domestically into butter, which probably leads to surpluses. The processing of skimmed milk concentrate presents more problems. There is in fact less capacity in the UK to process this than there is for cream. According to AHDB analyst Patty Clayton, this will mainly be a problem during the Christmas period and the high milk production in the spring. This puts pressure on prices to the detriment of producers.
Jorine Cosse
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