Dairy UK, the industry association for the UK dairy sector, has said the UK dairy industry needs to take responsibility for its own development if it is to become more profitable. The trade organisation said the industry must respond to the clear message from government that, henceforth, it is responsible for its own prosperity. image expired

Speaking at the launch of the white paper on Monday 5th September, Dairy UK director general Jim Begg said dairy farmers could no longer rely on government to make changes to the dairy sector. He cautioned that a future of deregulation would mean farmers would be responsible for their own activity.

He added that, in order to prepare for this, farmers must ensure innovation, consolidation and efficiency. In France suppliers are joining together to negotiate contracts on fairer terms in a second round of talks with processors. Following government intervention, after the first set of contracts offered by manufacturing giants including Lactalis were deemed “unacceptable” by agriculture minister Bruno LeMaire, producers have been forming cooperatives to better stand up to processors.

Although he acknowledged the beleaguered UK dairy sector faced serious challenges, Mr Begg stated that forging a stronger, more equitable supply chain was essential if the industry is to prevail. The UK is currently ranked 23rd in the European Milk Price League Table, out of the EU 27.

He said “Pressure on consumer spending due to the recession has slowed down price rises in the UK, while farmers have suffered a significant rise in input costs. These have had a clear impact on farmer confidence, but while the challenges the industry faces are formidable, they are by no means insurmountable.”

He continued that the White paper, in identifying areas of key importance to the dairy industry, could help with preparedness, “The White Paper is an important and respected part of the continuing debate over the future of the UK dairy industry. By addressing the issues the industry faces comprehensively and clearly, it demonstrates the important role dairy plays in all walks of life in the UK.”Top of FormThe 

Dairy UK said it believes that, while price volatility in world milk markets may continue for the foreseeable future, upcoming reform of Common Agricultural Policy and possibilities of the European Commission’s proposed dairy package will bring new possibilities for the Dairy sector and the sector must be ready to respond.

Key points made in the White Paper are:

• The UK dairy industry is happy to take on the responsibility for its own future. Strong supply chain co-operation will be the route to exploiting solid market fundamentals.
• Government can assist with a dispassionate evidence-based approach to the industry and with support for changes in the industry’s technology and production practices, and for its products
• The challenges the industry faces are formidable, but by no means insurmountable.
• Pressure on consumer spending, due to the recession, has slowed down the rate of price rises in the UK.
• Farmers have suffered a significant rise in input costs, which has had a clear impact on confidence.
• Although world dairy markets prices are currently at record levels, volatility on world markets will continue to create a fluctuating situation.
• Ongoing deregulation of the CAP and the end of milk quotas will open up new production possibilities as the European Commission’s Dairy Package works through to a conclusion.
• The industry remains fully alert to consumer scrutiny over its production practices, approaches to animal welfare and environmental integrity. The industry must remain consumer and not production driven.

Dairy UK’s white paper can be read here.