“New days and new ways”

Since the momentous decision of 23rd June, rarely a day has passed without someone examining the consequences, outcomes and impact of that Brexit vote.

So much has been negative in its output, and whatever an individual’s views of whether it’s best or not to be in the EU, I sometimes wonder where the British sense of ability, independence, creativity and courage disappeared to?

Maybe it’s the mentality of interdependence that the EU creates, maybe it’s the internationalism of trade, especially in the dairy conglomerates, and the tedious disruption this causes them, that has led to this outpouring of fear and a default to blame.

It’s my experience that in change there is always something to be gained, and usually by the nimble and alert. The thought then follows about who could be winners here in this moment of change?

Personally, I have the wishful desire that trade will be kept out of politics, after all that’s what we joined for, an economic union. However, seeing and hearing the views and behaviour of the EU spokesmen to date, I doubt it will be that easy, albeit we are a bigger customer to them by far than they are to us.

Winners could be in British Cheddar, since there may be a tendency to wrap ourselves in the flag, and those “buy British” slogans will roll out again. That trend to the preference of British cheese has been in mainstream retailers for some years now, and with the declining milk supply in recent months now nudging a staggering 9% fall, there may well be a rapid rise in milk prices as UK cheese becomes in greater demand, and milk for cheese is low in the pecking order for the integrated mass dairy produce makers.

Simultaneously the decline of Sterling creates a barrier to imports, especially Irish Cheddar, which frequently has filled that vacuum, and from their point of view they have not been idle and expanded markets elsewhere very successfully and may not be in a position to supply low cost Cheddar options in any event.

At the time of writing a new idea is being put forward, and it may well affect the UK too in the immediate term. The EU, with amazing timing, are allegedly looking to spend €500m from late autumn to encourage farmers not to overproduce milk.

So in this fairy dairy Euroland, if I read this right, we already have milk supply falling as commercial imperatives have driven out farmers, as well as reduced herds, as a consequences of those killer low milk prices.

Now as milk output falls through brutal commercial reality, there will now be payments not to overproduce. So doesn’t that mean further price increases for the milk that is produced? And as it’s nearly winter when volumes are at their lowest, their timing could not be designed to disturb what has already been a painful exercise. The words ‘pouring’, ‘petrol’ and ‘fire’ come to mind, but this time for other sectors of the trade.

So at a stroke there is no need to invest for efficiency or drive out uneconomic production, just the dependency culture revived and a wait for the EU dairy cheque to arrive, whilst not making anything. You couldn’t write a script like it.

The artisan sector may also quickly get a superboost, as the inexorable rise of the Continental premium sector over the past 10 years may find itself coping with the double whammy of price increases and exchange rate increased cost, and we might speculate that to be 15% or more. So shoppers too may look at UK-based alternatives even more favourably.

Customer reaction is a potential major factor throughout the EU. Especially if individuals are influenced by the negative comments of wounded EU politicians’ pride and it begins to become anti-British sentiment made obvious in the media or on TV, we must expect that a backlash will follow in the UK.

Let hope not, as there are few winners here, but politicians rarely have any commercial sense – otherwise they would be in business!

Elsewhere export opportunity may appear on the horizon, albeit some of this will be several years in the future. Many markets are restricted as a response to EU protectionist levels applying to their dairy exports. North America is the most obvious one, and President Obama’s comments of being at the back of the queue may not be as real as they seem.

Allied to this may be renewed market quid pro quo access for buying from countries such as the USA, Australia and New Zealand which have been restricted by heinous EU import levies which destroy their competitive edge. Value cheese from Wisconsin is far cheaper than EU make it, but in truth it does have some way to go on quality dimensions to meet standards we might accept. However, the USA has a thriving artisan maker groups and lots to offer.

In the end, much will depend on economics and politics as to how this plays out. Like many, I accept the status quo has much to offer if it can be achieved in the Brexit environment, but if for any reason it is not realised, then I also see many opportunities for home makers, exporters and importers in new directions. 

So as we make our way through the changes of the coming years, for those that will inherit the future it’s time to recognise new days and think of new ways to be at the forefront of cheese and dairy.