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UK Dairy Industry Eyes Milk Production Growth To Displace Imports, Hike Exports

A “Leading the Way” growth plan unveiled by the United Kingdom’s dairy industry late last month states than an estimated 2.5 percent annual growth in global demand for dairy products over the next 10 years will boost UK dairy production through increased exports and import substitution.

The sustainable growth plan is designed to encourage a growing and vibrant industry.

All key global indicators point to a bright future for dairy production, because demand is growing now and is going to continue to grow for some years to come. Population growth, increased wealth in developing nations and changing dietary habits all point to greater demand for dairy.

“For the British dairy industry this represents a fantastic opportunity to grow and wipe out the trade deficit, by displacing imports and exporting where it makes business sense,” the plan continued. “The British dairy industry is well placed to take advantage of this opportunity; it has fantastic natural resources, a well-established farm infrastructure and the makings of world class processing capacity.”

Globally, the dairy industry now operates as a single marketplace. The UK is cost-competitive in this environment and sits in the middle of the global dairy industry cost curve.

Eliminating the UK’s trade deficit can be achieved by producing 4.0 billion extra liters of milk, through yield improvement and at least half a million more cows, the plan explained. The expectation is that this growth will be met by existing dairy herds growing and new entrants, alongside the necessary growth in processing capacity.

Currently, 51 percent of raw milk in the UK goes to liquid milk and 27 percent to cheese. Some 62 percent of the cheese manufactured is Cheddar.

The British dairy industry’s sustainable growth plan is based on the three pillars of sustainability:

Economic: This includes growing the UK’s share of domestic and international markets; improving the UK dairy industry’s international competitiveness at all levels of the supply chain; harnessing the diversity that exists within the industry to exploit market opportunities; and building supply chain relationships based on a spirit of trust, collaboration and partnership.

Social: This includes producing safe and nutritious food that is valued and trusted by consumers; providing an attractive, rewarding career for all; constantly improving standards of animal health and welfare; and communicating a consistent and positive image of the British dairy industry and its products.

Environmental: This includes striving for the sustainable use of natural resources; minimizing the industry’s environmental footprint; protecting and enhancing biodiversity; and protecting and enhancing the social and amenity value of landscapes.

“The industry growth plan is founded on economic, social and environmental sustainability,” commented Billy Keane, chairman of Dairy UK, the trade association for the British dairy supply chain. “By uniting together around these sound principles, the whole dairy supply chain can have the confidence to invest in the future.

“The list of 43 organizations and companies who have endorsed this plan and share this common vision and sense of purpose, sends a powerful message about the UK dairy industry’s ambitions for sustainable growth,” Keane added.