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Dairy Farming

Volume 456: debated on Thursday 1 February 2007

To ask the Secretary of State for Environment, Food and Rural Affairs what the balance of trade was in the dairy sector in the last four years; what steps he is taking to improve it; and what assessment he has made of (a) the cost of milk production and (b) the producer price paid to farmers. (111435)

Over the period January to November 2006 the value of dairy products imported to the UK was £1.6 million and the value of dairy products exported from the UK was £0.6 million, a balance of -£1.0 million.

The Strategy for Sustainable Farming and Food identifies how the Government will work with the whole of the food chain to secure a sustainable future for English farming and food industries, as viable industries contributing to a better environment and healthy and prosperous communities.

The most recent published assessment of the cost of milk production was the Defra commissioned study into the economics of milk production in England and Wales in 2002-03 (published by the University of Manchester). Data on farm incomes, including dairy farms, are collected in the Farm Business Survey. The most recent data from the survey covers the year ended February 2006. Defra will be publishing incomes at UK level, by farm type, including dairy farms, on 31 January 2007. This will include forecast incomes for the year ending February 2007.

Defra collects and publishes milk producer prices on a monthly basis. Average UK prices for 2003 to November 2006 are shown in table 2.

Table 1: Value of UK trade in dairy products

£000

2003

2004

2005

January- November 2006

Imports

Butter

281,102

278,869

309,478

298,615

Buttermilk, Whey and Other Dairy Products

69,040

86,398

116,937

126,411

Cheese

743,898

810,598

853,824

801,283

Condensed Milk

17,770

22,913

33,221

37,312

Cream

16,223

19,908

19,422

17,808

Ice Cream

129,736

142,482

127,658

128,302

Whole and Skimmed Milk

13,641

13,886

16,773

23,836

Whole and Skimmed Milk Powder

44,975

52,170

65,629

58,942

Yoghurt

137,888

139,889

126,673

110,486

Total Dairy Imports

1,454,273

1,567,114

1,669,617

1 ,602,995

Exports

Butter

74,952

59,235

73,216

55,828

Buttermilk, Whey and Other Dairy Products

19,777

46,434

34,330

39,888

Cheese

179,415

201,560

219,476

204,570

Condensed Milk

15,046

10,756

6,470

7,530

Cream

119,558

81,797

72,248

72,616

Ice Cream

47,680

50,464

46,765

48,346

Whole and Skimmed Milk

48,130

58,404

100,503

90,575

Whole and Skimmed Milk Powder

212,035

219,429

115,411

97,929

Yoghurt

14,831

21,359

24,456

23,421

Total Dairy Exports

731,424

749,438

692,874

640,702

Balance of trade

Butter

-206,150

-219,634

-236,262

-242,788

Buttermilk, Whey and Other Dairy Products

-49,264

-39,964

-82,608

-86,523

Cheese

-564,483

-609,038

-634,348

-596,713

Condensed Milk

-2,724

-12,158

-26,751

-29,782

Cream

103,335

61 ,889

52,826

54,808

Ice Cream

-82,056

-92,018

-80,894

-79,956

Whole and Skimmed Milk

34,489

44,518

83,729

66,738

Whole and Skimmed Milk Powder

167,060

167,259

49,781

38,987

Yoghurt

-123,057

-118,531

-102,217

-87,065

Total Dairy Balance of Trade

-722,849

-817,676

-976,743

-962,293

Note:

2006 data are subject to amendments

Source:

HM Revenue and Customs

Data prepared by Trade statistics, Agricultural Statistics and Analysis Division, DEFRA

Table 2: UK Average milk producer prices

Average price (pence per litre)

2003

18.03

2004

18.47

2005

18.47

January to November 2006

17.90