Tough trading conditions, high input costs and increasing regulation had conspired to damage producer confidence, but the situation will improve in the long run, Dairy UK director general Jim Begg insisted. “Dairy demand growth is still outstripping production growth in the developing world,” he said. “In the UK and Western Europe, our consumers remain loyal and retain their appetite for innovative dairy products. As retailers must recognise, there is still strong demand for British dairy lines made with high-quality UK milk.”
Producers would begin to feel the relief of lower oil costs this year, while efforts to improve environmental sustainability would keep costs down as companies built more modern facilities, Begg added.