The vast majority of EU countries wish to increase output in the coming years, Promar claims
Promar International analysis shows UK may be unable to benefit from new dairy trade due to processing capacity
All major EU dairy producers will increase output steeply in the coming years, experts have said.
At farm business consultancy Promar’s press briefing last Thursday, the firm’s Andrew McLay said projected growth in EU dairy production could rise between 6.8 billion litres and 23bn litres following the end of dairy quotas.
But the UK will be unable to increase significantly without improving processing capacity.
The claims come following discussion with European countries as part of a report, The European Dairy Industry Towards 2020.
He said: “Every country we spoke to said if there was an opportunity they would increase production. People are looking to expand if the market is there.”
The conference heard the end of quotas would also bring opportunities for increased sales of Protected Designation of Origin and Protected Geographical Indication covered dairy products.
But the UK could be left behind in this expansion of dairy production without increases in capacity to process milk.
“What farmers need is services in a close proximity,”Mr McLay said. “When there is a good processor that is a good area to produce milk.”
He said the UK was ’not a bad place’ to produce milk but processing capacity within the region was a potential barrier.
The briefing also saw discussion about the possible structure of the industry going forward.
James Dunn, managing director at Promar, said: “Some people will fall by the wayside if they do not have technical improvements in place.”
Mr Dunn also raised hopes a dairy futures market would see development over the ’coming months’.
“I think it is not quite there yet. It does not give sufficient liquidity [for people to] use these markets but I know there are at UK level to make them viable.”
Source: FG Insight
