Brexit dairy offers: harsh realities short term, OPEC long-term

Interim findings from Trehane Fellowship study, ‘Identifying a Strategy for the UK Dairy Industry Post-Brexit’ suggest the dairy sector will face harsh realities in the short term after leaving the EU, but could gain significant opportunities from the need for supply chains to work together and from internationalising the industry’s focus.

The final report findings will be revealed at the annual Trehane Dinner on 17 October, with the full report released the following day at the inaugural RABDF Dairy Business & Policy Conference – also held in conjunction with The Trehane Trust.

Mike Houghton, Trehane Fellowship recipient of Andersons, explains that his findings have resulted from a number of investigative meetings in the UK and US, as well as in the Netherlands and Belgium.

He also points out that the productivity gains made in pigs, poultry and horticulture in recent decades suggest that income support of one kind or another experienced by dairy has actually discouraged productivity improvements.

Other areas that he mentions are the benefits of better supply chain communications, and the gains to be made from sharing pre-competitive supply and demand information in an effort to soften global price ‘volatility’.

Houghton says, “Brexit could well force supply chains to work more closely. If the processor can run the factory at 98% efficiency, everyone would benefit. But they never can because the supply of information from producers doesn’t allow them to. More trust within the supply chain and better communication could solve this.

“Brexit gives the UK more to gain if the world’s largest dairy businesses – which are in fact farmer owned – collaborated pre-competitively to talk volumes. In effect, this could create an ‘OMEC’ – an ‘OPEC’ for milk. Sometimes less could be more.”

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