Recent analysis by AHDB has shown that the UK’s dependence on foreign dairy imports has increased over the past two years. The UK runs a dairy trade deficit for many key dairy products, which means more product is imported than exported.

While this could provide opportunities for UK farmers in a post-Brexit scenario the immediate aftermath of Brexit could leave supermarkets struggling to source certain products.

Butter, for example is one of the UK’s key trade deficits and has risen substantially in the past two years, on the back of increased demand.

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For AHDB’s analysis, only the first half of 2018 is compared with the same period in 2016. There results showed that butter went from not having a trade deficit in 2016 to a 13,000t deficit for the first six months of 2018. The trade deficit for cheddar has also increased by 5,000t in the intervening two-year period to 10,000t in 2018.

On the other hand, there has been a combined 10,000t decrease in the trade deficit of both fresh and processed cheese. However, a large trade deficit still exists of a combined 48,000t. One thing is clear from the current trade situation is that in the event of a no-deal Brexit there will have to be considerable increase in domestic production if there is any disruption to current imports.

Production

After experiencing 11 consecutive weeks of milk production decline, production has finally steadied according to latest figures from AHDB. However, given the difficult growth conditions production for July 2018 is only down 0.9% when compared to July of last year, at 1,025m litres.

Looking forward it is expected to be a difficult autumn and winter as many silage stocks have been eaten into already this summer according to reports at AHDB’s recent Milk Forecasting Forum.

Farmers will now be faced with the challenge of destocking, drying cows off early or buying in more meal. However, with feed prices pushing up on the back of increased demand this may not be a viable option. All these factors could have a knock-on effect on milk production.