Liquid milk looks overseas
Stilton is one of the UK's biggest export success stories, where dairy products are concerned. Image: Shutterstock
The news last week that Arla Group will continue to invest in the UK is non-surprising. The British market is a large dairy consuming market, as well as being a decent sized producer of dairy. Unlike other markets, the British consumer also continues to drink fresh milk in reasonable quantities, as well as producing it.
Arla has also announced it will be looking to export more of its UK products overseas. Again, the British flag has a good reputation for export markets and let’s face it, if you can get a decent return for your products versus the domestic market, it makes sense to head west where the customers are.
A report by Kite Consulting also looks at this burgeoning export market, and suggests that it may be preferable to some domestic markets for some processors. The report, entitled Beyond Reset, builds on the analysis Kite conducted in October 2021, in its report Opportunities ahead, which outlined long-term global demand growth for dairy products. (www.kiteconsulting.com).
The report notes that this access to global markets is one that wasn’t an option in the past, and introduces a new dynamic in the sector, particularly for the liquid side of the business. It also suggests that using liquid milk as a loss leader for British retailers is not likely to remain viable.
John Allen, managing partner of Kite Consulting, adds: “If retailers want to secure long-term supply from partners that are committed to fulfilling their decarbonisation objectives, they need to provide a competitive market return. There has got to be a reset, prioritising fresh liquid milk and valuing it accordingly. UK farming become a potentially better place to be for the long term. Being out of the EU makes it a better place to export from, whether we wanted to leave or not. It created a situation and dynamic for the export business.”
- Suzanne Christiansen, editor, Dairy Industries International.
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