FDBusiness.com

– There is “great confidence” in the future of the British dairy sector, according to Dairy UK director general, Jim Begg. –

Recent investment in, and efficiency efforts by the British dairy industry demonstrates that there is “great confidence” in the future global success of the sector, departing Dairy UK director general, Jim Begg, has claimed.

Begg, who announced plans last week to retire from the British dairy industry after more than 40 years, told DairyReporter.com that the “foundations” for the British dairy industry to compete at an international level are already set.

But milk producer-processors issues must first be resolved before the sector can compete on the global stage, he added.

“If you add it all up – the growing consumer demand, the recent investment, the industry-wide efficiency efforts, and real interest in developing the market – you’ve got the foundations for a successful future,” said Begg.

“Now we just have to get it right in terms of judgement, but all the foundations are there to make a success of it.”

Natural milk production advantage

To compete on an international level, Britain must first get the most out of the many “natural advantages” it has in terms in milk production.

“Northern Europe has an advantage. After that it is a question of providing the processing capacity and running it efficiently,” he said. “I have no doubt about our ability to do that.”

“The difficulty is triggering it because dairy processing need milk supply security and farmers need confidence to provide that security. It can be a bit of a vicious circle at times, but as I sit here now we’re in a better place than we were a year ago.”

Last summer, the combination of planned milk price reductions and increasing producer operating costs led to country-wide dairy farmer-led protests. Processors and retailers up and down the country were targeted, causing widespread disruption.

The situation appears to have cooled, since then, said Begg.

Milk prices have improved and a Code of Best Practice has been developed by the National Farmers Union (NFU), NFU Scotland and Dairy UK to provide dairy farmers with assurances that their contracts are not putting them at a disadvantage in the marketplace.

“I think the last year demonstrates the ability to understand problems and address them quickly,” said Begg. “Since then, everyone has worked very hard to establish better supply chain relationships.”

“The talks will go on, and I’m pretty sure that a key priority of my successor will be to facilitate closer relationships between British farmers and processors.”

“The power of added value”

Last week, Dairy UK announced that Begg will retire from the British dairy industry later this year after more than 40 years within the sector – having working on behalf of both milk producers and processors during that time.

“The British dairy industry has obviously changed massively since then,” he said, pinpointing evolving consumer demand for liquid milk as one of the most significant developments.

“What is considered to be the original full-fat product is now more or less considered a niche product,” said Begg. ”We’ve moved on enormously from whole milk, and I anticipate that the consumption and production of low-fat liquid milk products will increase in coming years. I think the main driver for that will be legislation in the European community.”

These changing consumer tastes have also led to the generation of “new businesses” he said.

Looking ahead, Begg identified “the power of added value” as the key to domestic dairy product demand growth.

“We have to find a way of combing growth in emerging markets in other parts of the world, and shifting reliance from commodity products to added value products which return higher values,” he said.

Pressed on his plans for retirement, Begg said: “If anybody is looking for me, I’ll be on the beach.”