UK dairy trade surplus fell in 2020

The UK trade balance for all dairy products (including shipments of unprocessed milk/raw milk crossing the border for processing) was up in volume terms in 2020 for the second year running, according to the UK Agricultural and Horticultural Development Board (AHDB). There was a surplus of 33,000 tonnes, which compares to a surplus of 93,000 tonnes in 2019, according to Bronywyn Magee, trainee analyst at the UK’s AHDB.

The main reason for the reduced surplus was an increase in the trade deficit for yogurt, she notes. Fewer exports of butter and whole milk powder (WMP) were other factors behind the drop in the trade surplus. Higher imports of yogurt, combined with a drop in exports resulted in the trade deficit increasing by 51,000 tonnes to reach 235,000 tonnes. This compares to a deficit of 184,000 tonnes in 2019.

Meanwhile, the cheese trade balance, saw the largest improvement compared to 2019, while remaining in deficit. Exports of cheese were 15,000 tonnes lower (7%), but this was offset by an 8% drop in imports, equal to 41,000 tonnes. This is a result of fewer shipments from Ireland, which were down 12% on the year. The reduced foodservice demand resulting from Covid-19 likely reduced import demand.

In value terms, the trade deficit increased by 6% to £1.16 billion (€1.35bn) for 2020, amounting to a drop of £62 million (€72.2m) from last year. While the value of imports across all categories fell by 5%, the total value of exports dropped by 11%.

All key product categories, with the exception of cream and powders, recorded a value trade deficit in 2020. Cheese, butter, yogurt and concentrated milk were already running trade deficits, which grew in 2020. For milk powders, the value trade surplus was reduced, Magee notes.

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