17 September 2015

3 minute read

This is if growth in production is to successfully be exported out of the EU over the next five years, a markets analyst told UK Dairy Day yesterday.

Europe’s milk production is expected to grow anywhere between five and 15 per cent by 2020, something which Promar International’s Andrew McLay described as a “positive story”.

This is an increase of between 6.8 to 23 billion litres, he said: adding: “Even at the top end of estimations, we do not envisage extra EU milk flooding the market.

But he stressed all this milk must be exported.

“No one is saying that Europe can consume this extra milk,” said Mr McLay. “Processors must build markets overseas.

“All dairy businesses have been active in developing processing capacity, but now, over the next five years, need to be equally active in developing distribution channels.

He noted the work Friesland Campina and Arla had down in developing distribution channels in regions of Africa.

Mixed Bag Member States

Discussing a recent forward looking Promar report, Mr McLay stated that not all countries will expand production.

Growth will be centred on the northern belt of the continent, western Britain and regions boasting PGI brands like areas of France and the Po Valley in Italy.

He added that some countries have been clearly gearing up for higher production, particularly the grass-based Irish farms, which were reported at mid-summer to have increased production by 16 per cent.

Spain and Finland are among countries that “probably wont grow”, with Germany, France and the UK, being a mixed bag in which some farms will look to expand and others not so.

“Along with the Irish, the Netherlands and Denmark are the countries looking to see a big increase in production.”

Furthermore, he listed land prices and labour as key factors that are hugely variable across different countries.

“While we view Polish labour as exceptionally good in the UK, in Poland, one of their biggest constraints is a lack of good quality labour,” he said.

He added that land prices between French regions, compared with Italy and the UK vary hugely.

What Farms Should Do

He said a change of culture may be needed on farms to adopt new practices and techniques, adding that change was inherently viewed as failure all too often in farming.

“Whether its selling a herd, scaling back your system, adopting new approaches, change is frequently deemed as failure.

“The mentality of farming is, you did it for a hundred years and now you don’t – you’ve failed.”

He called on farmers to be smart, entrepreneurial – the kind who manage others well.

"If you don’t have simple farming system then you have to have the information to inform your system,” he added.

Michael Priestley
News Team - Editor

Mainly production and market stories on ruminants sector. Works closely with sustainability consultants at FAI Farms