Brexit may not have happened yet, but the uncertainty it has already created has been a disaster for the traditional dairy trade flows between Ireland and the UK.
The original Brexit deadline of March 29 created an artificial cliff edge for supermarkets, food service companies and other dairy buyers in the UK.
This caused the mass stockpiling of dairy product in the UK in a bid to mitigate the potential disaster that would have been a no-deal Brexit.
The end of March came and went and the threat of a no-deal was kicked six months down the line, leaving UK stores full to the brim with dairy stocks, much of it of Irish origin.
End-users of dairy are still working their way through these stocks now, meaning the amount of dairy currently moving from this island across to the UK in what is our peak production month is much, much lower than a typical year.
The sluggishness of dairy trade between Ireland and the UK now means that Europe’s dairy market is more downbeat than it should be.
Leaving Brexit aside, the conditions in Europe are actually ripe for dairy markets to rise as a result of a weak euro, slowing milk production in the US and New Zealand, strong demand from China and the successful clear-out of the SMP intervention stocks.
Yet Brexit remains a weight on prices rising.
Worryingly for dairy markets, the Brexit deadline has only moved to October, meaning more stockpiling is likely in the second half of 2019.
Brexit may not have happened yet, but the uncertainty it has already created has been a disaster for the traditional dairy trade flows between Ireland and the UK.
The original Brexit deadline of March 29 created an artificial cliff edge for supermarkets, food service companies and other dairy buyers in the UK.
This caused the mass stockpiling of dairy product in the UK in a bid to mitigate the potential disaster that would have been a no-deal Brexit.
The end of March came and went and the threat of a no-deal was kicked six months down the line, leaving UK stores full to the brim with dairy stocks, much of it of Irish origin.
End-users of dairy are still working their way through these stocks now, meaning the amount of dairy currently moving from this island across to the UK in what is our peak production month is much, much lower than a typical year.
The sluggishness of dairy trade between Ireland and the UK now means that Europe’s dairy market is more downbeat than it should be.
Leaving Brexit aside, the conditions in Europe are actually ripe for dairy markets to rise as a result of a weak euro, slowing milk production in the US and New Zealand, strong demand from China and the successful clear-out of the SMP intervention stocks.
Yet Brexit remains a weight on prices rising.
Worryingly for dairy markets, the Brexit deadline has only moved to October, meaning more stockpiling is likely in the second half of 2019.
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