UK records first trade surplus for dairy products

Wednesday, 4 March 2020

By Kat Jack

The UK trade balance for all dairy products* was positive in volume terms in 2019, with a surplus of 95k tonnes of product. This is the first trade surplus on record (records start 1997). The largest improvements in trade balances were in skim milk and buttermilk. Cheese, yoghurt and butter** are still trading at a deficit, though this deficit was reduced for butter and cheese. The powder trade surplus increased. Cream trade, although small, did shift from a trade deficit in 2018 to a surplus in 2019.

The marked improvement in the trade balance for skim milk is a direct result of a shift in trade patterns across the Irish border. In 2019, exports of skim milk to Ireland increased by 20k tonnes, while imports from Ireland fell by nearly 59k tonnes.

For buttermilk, there was a small increase in exports, but the main reason for the improved trade balance was a significant drop in imports (103k tonnes). Shipments from France, Belgium and Germany accounted for most of the drop.

In value terms, there was still a trade deficit, but it was smaller than in 2018. The value of exports grew, while the value of imports shrunk. Butter was a notable contributor to the improvement in the value trade deficit. This is partly because we imported less in 2019, but also because lower prices meant the volume deficit was worth less overall.

 

*HS codes 0401-0406

**Butter here includes both butter and other fats and oils derived from milk. However it does not include Lurpak as this is traded under a 2106 trade code (miscellaneous food preparations). Around 50k tonnes of Lurpak is imported into the UK each year, meaning even if this is accounted for the trade balance is still in surplus.

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Katherine Jack

Senior Analyst - Dairy

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