Welsh milk balance

Wednesday, 12 May 2021

By Chris Gooderham

In 2020/21, it is estimated that Welsh farmers supplied 2.0 billion litres of milk. Of that milk, 50% was processed in Wales and 50% was transported into England for processing. Of the volume processed in Wales, the vast majority (47% out of 50%) was turned into cheese.

Supply

While GB milk production fell slightly in 2020/21 compared with the previous year, production in Wales is estimated to have risen by 1.5%. That has been driven by an estimated 1.2% increase in milk yields, and a small increase in the dairy herd. This is a continuation of the trend we’ve seen over the last 5 years. Wales’ herd size has risen 2.4% since 2015, while England's and Scotland’s have both reduced (-4.3% and -1.6% respectively)

Processing

Overall cheese production is estimated to have increased this year, but overall processing reduced because of the closure of Tomlinson’s dairy mid-way through 2019/20. That closure is now fully reflected in the 2020/21 figures.

The future

Long-term trends in consumption and processing, show an increase in the amount of milk used to make cheese and yogurt. The UK is a net importer of both products, so there is domestic demand readily available. Domestic consumption of overall cheese continues to grow. By 2030, we expect around a third of the milk coming off farm in the UK to end up in cheese. That is where Wales is well placed to take advantage with good cheese processing facilities, a product that consumers want, and plenty of milk locally to make more.

The challenge comes with ensuring we have the assets and infrastructure in place to take advantage. That is going to take investment by processors, but also government support. Processors need access to affordable labour, suitable road networks and a cost-efficient energy supply. However, above all, they need to be able to compete with companies from other nations. That means a level playing field when it comes to planning permission, and the policy environment, such as NVZ implementation.

Image of staff member Chris Gooderham

Chris Gooderham

Head of Market Specialists - Dairy & Livestock

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