Dairy Council NI says No Deal will devastate dairy industry

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Dairy Council Northern Ireland warns that a No Deal Brexit will put Northern Ireland’s dairy industry into dire straights. Anna Tobin reports

A No Deal Brexit will mean that Northern Ireland’s dairy industry will find it very difficult to service profitable markets, to process all milk and support the jobs and livelihoods of more than 3,000 farm families across Northern Ireland, Dairy Council Northern Ireland has stated. The current trade tariffs for exporting both raw milk and the finished product would be in excess of £300 million, which would directly result in an impact on the price paid to farmers for their produce.

Dairy Council Northern Ireland (NI) represents milk processors in Northern Irelenad, including Dale Farm, Glanbia Cheese, Glanbia Ireland and Lakeland Dairies, four companies that account for over 90% of the 2.4 billion litres of milk collected from NI farms annually.

“Based on Dairy Council Northern Ireland calculations, in a no deal Brexit, trade tariffs on both raw milk and finished products moved from Northern Ireland to the EU would total £320 million, before you calculate the cost of the administrative burden customs will place on dairy processors,” said Dr Mike Johnston, CEO of Dairy Council Northern Ireland (NI).

“This tariff represents 25% of the value of our entire industry. In a sector where the margin is, at best, 3% or 4%, trade tariffs of that magnitude would wipe out the industry. The reality is stark for farmers. Our analysis suggests that the milk price paid to farmers would fall by over 10 pence per litre from its current base should such tariffs be imposed.”

Milk processing

Just over a third (35%) of Northern Ireland’s milk is processed in the Republic of Ireland. “The dairy industry in Northern Ireland simply does not have the capacity to process all the milk produced on farms at present and we are seriously exposed,” added Johnston.

“After maximising NI milk processing capacity, there is a processing shortfall of some 600 million litres that will not have a viable home if politicians cannot find a solution to the current Brexit impasse. That would be a devastating situation for the Northern Ireland dairy industry, farming families, rural communities and the Northern Ireland economy.

“If we don’t get a Brexit deal and cannot transport raw milk south, without significant delays and/or certification requirements, then our industry is facing a crisis of epic proportions. All processing sites in Northern Ireland will be full, while there is no spare capacity to process that volume of milk in Great Britain.

“We have communicated these significant risks in the event of a no–deal to authorities in NI, the Republic and London, but have not got any satisfactory outcome so far. Farmers and processors are extremely worried about the outcome of a no deal Brexit. We are now less than 25 days away from Brexit and we are still faced with more questions than answers and more uncertainty than certainty. Our farmers, their families, our customers and the entire rural economy of Northern Ireland need greater security and clarity…

“Put simply, dairy processors and their farmers will not survive unless there is a deal. NI farmers, processors and customers need a deal to mitigate trade tariffs and enable the continued movement and trade in raw milk and finished products.”