Dairy industry in the UK: statistics Standard Note: SN/SG/2721 Last updated: 29 January 2015 Author: Carl Baker Social & General Statistics Section This note sets out key statistics and current trends for the UK dairy industry. Milk accounted for 16.1% of total agricultural output in the UK in 2013. The number of dairy cows in the UK has declined steadily since 1980. The total has fallen from 3.2 million in 1980 to 1.8 million in 2013: a 45% reduction. Farm-gate milk prices rose from 18p/litre in 2007 to 34p/litre in 2013, and have since fallen to 29p/litre as of November 2014. Contents A. UK dairy industry 2 B. UK dairy herd 2 C. Production 3 D. International Trade 4 E. Consumption 5 F. Farm-gate prices 5 1 A. UK dairy industry The UK is the third-largest milk producer in the EU after Germany and France, and the tenthlargest producer in the world. Milk accounted for 16.1% of total agricultural output in the UK in 2013.1 Around 14 billion litres of milk are produced each year. Most of this is consumed within the UK, as liquid milk and dairy products. The industry was worth £4.27 billion at market prices in 2013.2 In 2014 (Jan-Nov) around half (48%) of the milk processed in the UK was used for liquid milk. A further 26% was processed as cheese.3 B. UK dairy herd Table 1 shows that the number of dairy cows in the UK has declined steadily since 1980. The total has fallen from 3.2 million in 1980 to 1.8 million in 2013: a 45% reduction. The decline in the size of the dairy herd has been accompanied by a similar fall in the number of dairy producers. Table 2 shows that the number of registered dairy producers in the UK fell from 31,731 in 1998 to 14,159 in 2013. Table 3 shows that the average herd size has risen, as those holdings with smaller herds have left the industry. In 2013 the average number of cows per herd was 123, compared to 95 in 2003. Table 1: Dairy cow numbers (thousands): UK 1980-2013 1980 England & Wales 2,672 Scotland¹ 282 Northern Ireland 270 United Kingdom 3,224 1985 2,580 274 294 3,148 1990 2,324 245 278 2,847 1995 2,103 226 271 2,600 2000 1,844 207 284 2,335 2005 2006 2007 2008 2009 2010 2011 2012 2013 1,575 1,495 1,470 1,428 1,384 1,381 1,349 1,345 1,336 197 187 183 175 170 168 162 163 167 291 285 286 289 285 281 283 285 280 2,063 1,979 1,954 1,909 1,857 1,847 1,814 1,812 1,782 Notes: Source: 1 ¹ Provisional June Census Data. DairyCo, Cow Numbers http://w w w .dairyco.org.uk/library/market-information/datum/cow -numbers.aspx Defra, Agriculture in the United Kingdom 2013, Table 4.1: Defra, Agriculture in the United Kingdom 2013, Table 8.5: 3 DairyCo. UK Milk Utilisation. 2 Table 2: Number of registered dairy production holdings, June: UK 1998-2013 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: England & Wales 24,681 23,286 21,772 20,191 18,695 16,977 15,846 14,732 13,778 12,867 12,252 11,743 11,256 10,851 10,724 10,581 Scotland 1,951 1,896 1,795 1,624 1,639 1,590 1,569 1,523 1,472 1,429 1,351 1,298 1,263 1,189 1,163 894 Northern Ireland 5,121 5,039 4,855 4,741 4,596 4,425 4,201 4,058 3,761 3,619 3,457 2,967 2,781 2,753 2,662 2,684 United Kingdom 31,753 30,221 28,422 26,556 24,930 22,992 21,616 20,313 19,011 17,915 17,060 16,008 15,300 14,793 14,549 14,159 DairyCo, Producer Numbers http://w w w .dairyco.org.uk/non_umbraco/dow nload.aspx?media=5197 Note: Figures for Scotland are for dairy type holdings - where dairy farming contributes more than 2/3rds of the holding standard gross margins up until 2012. As of June 2013, Scotland has changed its typology which is now based on 11 farm types and uses the cattle tracing scheme resulting in a significant fall in the number of holdings compared with 2012** Table 3: Average dairy herd size: UK 2003-2013 England Wales Scotland Northern Ireland United Kingdom Source: C. 2003 102 91 125 66 2004 105 88 124 69 2005 105 91 129 72 2006 111 96 135 84 2007 117 102 138 91 2008 119 105 142 97 2009 121 105 144 96 2010 125 112 146 101 2011 126 115 153 103 2012 131 117 157 107 2013 134 118 153 86 95 97 99 106 112 115 116 113 117 121 123 DairyCo, Average herd size http://w w w .dairyco.org.uk/non_umbraco/dow nload.aspx?media=5186 Production While the number of UK dairy cows has decreased, the yield per cow had been increasing up to 2011. As a result, total domestic milk production has been fairly static between 2008 and 2013, following a slight fall between 2005 and 2008 (see Table 4). Table 5 details milk production over the period 1992-2012 in the fifteen top milk-producing countries in 2009. The decline in production over the period in the UK corresponds to reduced outputs in a number of other European countries. By contrast, production in China, Pakistan, India, Brazil and New Zealand has increased considerably over the period. Note that since the Defra figures and UN figures are gathered and reported on a different basis, the production figures for the national dataset do not precisely match the international dataset. Table 4: Milk production: UK 1998 to 2013 1998 Total milk production (million litres)¹ 14,213 Average yield (litres per cow) 5,775 2003 14,576 6,621 2008 2009 2010 2011 2012 2013 13,319 13,128 13,453 13,665 13,444 13,539 6,943 7,031 7,273 7,528 7,442 7,535 Note: Source: ¹ Please note that total milk production is based on all milk produced on farm, including the milk w hich is delivered to dairies, milk used on farm in the production of dairy products, milk consumed in farm households, milk fed to livestock and farm w aste. Suckled milk is p Figures are provisional Defra, Agriculture in the UK 2013, Table 8.5 Table 5: Cows milk production in the 15 top milk-producing countries in the world in 2012: 1992-2012 million tonnes 1992 1997 2002 2007 2012 USA 68.4 70.8 77.1 84.2 90.9 India 24.3 29.1 34.6 46.8 54.0 China 5.3 6.3 13.4 35.6 37.8 Brazil 16.3 19.2 22.3 26.1 32.3 Russia 47.0 33.8 33.2 31.9 31.6 Germany 28.0 28.7 27.9 28.4 30.5 France 25.7 24.9 25.2 24.4 24.0 New Zealand 8.1 11.1 13.9 15.6 20.1 Turkey 8.7 8.9 7.5 11.3 16.0 UK 14.8 14.8 14.9 14.0 13.9 Pakistan 3.8 7.6 8.4 11.1 13.4 Poland 13.2 12.1 11.9 12.1 12.7 Argentina 6.8 9.4 8.8 9.8 11.8 Netherlands 11.9 10.9 10.7 11.1 11.7 Ukraine 19.0 13.5 13.8 12.0 11.3 Source: FAOSTAT, Food and Agriculture Organisation of the United Nations Change 1992-2012 Change 2002-2012 +33% +122% +616% +99% -33% +9% -7% +149% +83% -6% +254% -4% +74% -2% -41% +18% +56% +183% +45% -5% +9% -5% +45% +113% -7% +60% +7% +34% +9% -19% http://faostat.fao.org/site/339/default.aspx D. International Trade There is little overseas trade in liquid milk, but considerable trade in processed products. In 2013 1.2% of liquid milk produced in the EU was exported.4 Table 6 shows that the UK had a negative trade balance in butter and cheese in 2013, but a positive trade balance in milk & cream. Imports make up a very small proportion of total supply of liquid milk in the UK. 1% of milk available to UK dairies was imported in 2013.5 However, milk imports have risen from 75 million litres in 2009 to 132 million litres in 2013 (provisional). 4 5 DairyCo. Dairy statistics: an insider's guide 2014, p54. Defra, Agriculture in the United Kingdom 2013, Table 8.5: Table 6: UK trade balance in dairy products, 2009 Thousand tonnes Imports Exports 2008 2013 2008 2013 Cheese 422 469 88 125 Milk & Cream 193 245 533 575 81 105 24 45 Butter 2013 figures are provisional. Source: Defra, Agriculture in the UK 2013 E. Consumption In 1995, doorstep delivery accounted for 45% of household purchases of milk in Great Britain. By the end of 2013, this proportion had declined to 3.2%. This switch has been accompanied by a growing price differential between milk from the two sources. In 1995, a pint of milk cost an average of 37.9p on the doorstep and 23.9p from retailers. By the end of 2013, a pint cost 81p on the doorstep and 28p from retailers.6 F. Farm-gate prices Farm-gate prices are those received by milk producers. They are monitored monthly and represent the average price per litre, net of delivery charges. Chart 1 shows that until 2007, the trend was towards declining prices, from around 25 pence per litre (ppl) in 1997 to 18 ppl in November 2007. There was a sharp upturn in prices in late 2007 and a sustained rise from 2010 onwards. Late 2014 saw a fall in prices to 29ppl, the lowest rate for two years. 6 DairyCo Liquid Milk Market Chart 1: Farmgate milk prices 1991-2014, including bonus payments 40 35 30 pence per litre 25 20 ` 15 10 Average monthly price 12 month moving average 5 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 0 Chart 1: Farm-gate milk prices: Jan 1991 to March 2014 Notes: ¹ Average UK milk prices, net of delivery charges and including retrospective bonuses. No deductions for suprelevy have been made. Source: DairyCo, Farmgate milk prices