Brexit negotiations and the UK dairy market – Dairy Market Report Q3 2018

Brexit negotiations and the dairy marketDespite the continued turbulence on pricing, particularly evident for butter and mozzarella, we can at least now say we have experienced relative stability over the last few weeks. However this can possibly be linked with the holiday season and traders have been quiet. Another cloud looming on the horizon however is Brexit and negotiations don’t seem to be making much progress.

The threat of a deadlock between both sides now seems to be a growing possibility and major dairies have warned of the potential impact this could have. The UK relies heavily on imported dairy product to sustain demand so shoppers will feel the pinch if there is an unfavourable deal. The Guardian reports that the head of Arla, Ash Amirahmadi, has warned of the potential increase in costs to their product post Brexit due to the extra time transporting goods will take. According to him shortages of product will become more common and everyday staples we take for granted today could soon turn in to luxury products.

Value of UK cheese exports rose by 23% in 2017

On a brighter note there are reports of a boom in UK cheese production which has been driven by demand from Asia. Value of UK cheese exports rose by 23% in 2017 which included a 27% increase in exports to the Philippines and a significant increase to the booming Chinese market. Demand for classic British Stilton is a big driver of this new route to market but interestingly there has also been a big demand for British Mozzarella and Cottage Cheese. The decline in the value of Sterling has no doubt made prices more competitive for British producers but this does offer some light at the end of the tunnel in terms of potential possibilities in a post Brexit environment. The taste for dairy is ever increasing in the emerging Asian market and if the UK can stake a claim on even a small percentage of this market it opens up many potential opportunities.

 

CONTINUE READING: Q3 DAIRY MARKET REPORT 2018

 

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