Dairy Council NI warns of ‘certain doomsday scenario’ in no-deal Brexit

In the event of a no-deal Brexit, Northern Ireland’s (NI’s) dairy industry is “facing a major crisis”, according to the Dairy Council NI.

In a statement issued this morning, Monday, October 7, the council warned that in the event of the UK crashing out of the EU without a deal, NI’s dairy sector is “seriously exposed” in terms of the ability service markets, to process all milk and support the livelihoods of more than 3,000 farm families across Northern Ireland.

CEO of Dairy Council NI (DCNI), Dr. Mike Johnston has outlined that current trade tariffs for exporting both raw milk and finished product would be “in excess of £300 million which would directly result in an impact on the price paid to farmers for their milk”.

“Based on DCNI’s calculations in a no-deal Brexit, trade tariffs on both raw milk and finished products moved from NI to the EU would total £320 million, before you calculate the cost of the administrative burden customs will place on dairy processors.

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 10p/L from its current base should such tariffs be imposed.”

DCNI represents milk processors in NI including: Dale Farm; Glanbia Cheese; Glanbia Ireland; and Lakeland Dairies.

These four companies account for over 90% of the 2.4 billion litres of milk collected from NI farms each year.

Processing shortfall

Johnston sounded a word of caution around the milk processing capacity availability in Northern Ireland.

At present, 35% of the entire NI milk pool is processed at facilities in the Republic of Ireland.

The dairy industry in NI simply does not have the capacity to process all the milk produced on farms at present and we are seriously exposed.

“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.

“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 NI will be full while there is no spare capacity to process that volume of milk in the UK.

“We have communicated these significant risks in the event of a no deal to authorities in NI, the Republic of Ireland 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 and need greater security and clarity.”

Concluding, Dr. Johnston said: “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.”