As EU milk quotas come to an end this week, NFU dairy board chairman Rob Harrison has urged all countries to act responsibly and collectively to manage future volatility.
Milk quotas were introduced in 1984 to address the structural oversupply on the EU market of the late 1970s and early 1980s that had led to the infamous milk lakes and butter mountains.
Mr Harrison said it was difficult to predict what will happen once they are abolished, adding that UK farmers and dairy processors here had some concerns about the reaction of their EU counterparts.
“Some are rapidly increasing their output without an end market for these goods,” he said.
“With milk prices yet to show any strong signs of recovery, this could push farmgate milk prices down further in the EU, and stall any recovery in the dairy markets.
“It’s vital that expansion in any Member State is planned in accordance with available market opportunities.”
He added that in the UK, low and volatile prices had had much more of an impact than quotas, with the country having been under quota for the past 15 years.
“Environmental factors will play a greater role across the EU in the future, especially with plans for ammonia and methane reduction targets on the horizon,” he said.
“Weather and animal health issues - specifically bovine TB - are also major factors affecting the UK dairy industry.
“We know a number of tough challenges lie ahead, especially with prices, but the long-term outlook is good, with growing demand and production opportunities.
“However, the next government and the EU must do more to ensure a sustainable future for the dairy sector and help make tools available for farmers to manage volatility.”
Dairy processors themselves, meanwhile, needed to recognise and promote potential markets both at home and abroad, while looking to develop new products such as sports drinks.
“Through all of this, it’s heartening that the British public is still supporting the British dairy industry and voting for Great British food,” Mr Harrison said.
“I urge them to continue buying British milk, cheese, yoghurt and butter. Look out for the Red Tractor and keep on backing British farming.”
In the past few months, many North East dairy farmers have been hit by plummeting farmgate prices, suggesting a challenging future for the sector should such trends continue.
NFU vice chairman for Northumberland Hugh Richardson told The Journal that while end of quotas might save him “half a day’s paperwork”, it would otherwise have very little impact on his farming operations at Wheelbirks, near Stocksfield.
While new producers could benefit, he added, the UK sector as a whole would unlikely experience much upheaval as a result of the change.