Brexit could push milk volumes past capacity this spring

Published 27 March 19

Milk production in the first two months of 2019 has been running at around 2.5% higher than 2018 for GB, amounting to roughly 48 million litres extra milk. Latest forecasts suggest this trend will continue into the spring, with the expectation of a further 3.3 billion litres of milk delivered over the peak period (Apr-Jun). This represents growth of 2.4% over last year’s volumes at a time when processing and storage capacity are stretched.

The expectation of a strong spring generally raises concerns around processing capacity. Looking at delivery volumes for the peak months over the past 10 years shows they have previously been at similar levels in 2015, 2017 and 2018. The current forecast for May would put volumes higher than any month in those 10 years.

Flush Volumes Graph

What may be different this year is the risk of additional milk arriving in GB from Northern Ireland (NI). In the case of a hard Brexit, raw milk crossing the Irish border for processing would face a tariff of €218/tonne. At current exchange rates, this would equate to around 18ppl, or more than 60% of current farmgate milk price In NI.

Based on volumes exported between April and June in 2018, this could boost milk volumes going through GB processing plants during the spring by a further 7%. It is unlikely that GB processors would be able to manage that volume of milk.