Keir Starmer has been urged by the NFU and Dairy UK to “remain steadfast” and “not barter away greater market access to the US”, that would jeopardise the future of “already under pressure UK dairy farming businesses”.
US president Donald Trump arrived in the UK overnight for a historic second state visit, having told reporters ahead of his departure from Washington DC that “we’ll talk to them” about “a little better [trade] deal”.
But in a joint letter, sent to the PM, plus the Defra and Business & Trade secretaries by the two industry groups yesterday, Starmer was warned “that increased US access to our food and drinks market risks destabilising UK markets, weakening domestic food security, undermining domestic standards and ultimately reducing the viability and profitability of many dairy farms”.
The existing agreements made when the UK-US Economic Prosperity Deal was signed in May, put alongside trade agreements with New Zealand, Australia and most recently India, “already represent significant concessions to our dairy sector”, the letter read.
These deals had seen tariff and quota-free access for dairy exports to the UK granted both immediately and by 2028, added an accompanying NFU report. And in the case of New Zealand and Australia, exports of dairy to the UK had already seen “significant growth”, it pointed out.
Citing the impact of the UK-New Zealand FTA in particular, the NFU revealed imports from the country had risen by more than 3,350% from 2023 to 2024, from just 346 tonnes to 11,942 tonnes. This meant New Zealand was now the largest exporter of dairy to the UK outside the EU, followed by Switzerland.
The NFU report also set out the differences between the UK and US when it came to economies of scale, production systems, welfare standards and attitudes to medicine usage and environmental obligations.
“The UK government continues to ask more of British farmers with ever higher standards, without asking imported products to meet them too,” it argued.
This allowed US producers to hold a competitive advantage over UK businesses, it said, pointing to examples in the differences in regulatory production requirements and SPS food safety standards between the two countries – such as “the lack of federal legislation on animal welfare for farmed animals and antibiotics use, which could also undermine consumer trust and confidence”.
Read more: Will UK producers benefit from trade deal with the US?
US dairy farmers also receive enhanced government support via a raft of subsidies, the NFU report claimed.
For example, the Federal Milk Marketing Orders established a minimum price paid to famers depending on the end use of that milk. Other federal programmes include voluntary subsidised insurance programmes.
In total, US dairy received government subsidises of more than $20bn a year (£14.54bn), with estimates suggesting such subsidies equated to 1.21 pence per litre of milk.
“It is therefore the strong view of the NFU and Dairy UK that UK farming can give no further concessions without suffering serious impacts to its viability,” the two industry groups stressed.
The deal struck between the UK and US has already seen American bioethanol exporters given tariff-free access to the UK market for 1.4 billion litres of their product – in a move that has effectively killed off the UK market, with ABF-owned producer Vivergo shuttering its Hull plant in August after it became unviable.
Rival producer Ensus continues to be in discussions with the government over a bailout, with its precarious future also potentially raising questions about supplies of CO2 gas critical to the food sector – with Ensus producing about 30% of the UK’s needs as a byproduct of bioethanol production.
Alongside tariff-free access to the UK market for up 13,000 tonnes of hormone-free US beef, US agriculture secretary Brooke Rollins has previously suggested the country could also look to secure increased access for other agrifood products, such as chicken, pork, rice and seafood.
“It is vital that the UK maintains its existing tariff protections when it comes to critical agricultural sectors,” said NFU dairy board chair Paul Tompkins.
“We have made that abundantly clear in our letter to the prime minister. The UK cannot continue to barter away domestic food security in pursuit of tariff reductions in other sectors which may never materialise, and which could simply take us back to the status-quo pre ’Liberation Day’,” he added.
“Any increased access given to the US in the Economic Prosperity Deal currently under negotiation could put our domestic dairy sector at risk. Both the NFU and Dairy UK urge the prime minister to hold firm.”
No comments yet