Despite the ongoing concerns relating to Brexit and Covid-19, there are huge opportunities for Scotland’s dairy industry, but it requires massive investment in the whole supply chain if it is to prosper.

That was the stark warning from dairy consultant and commentator, Chris Walkland, speaking at AgriScot’s Scottish Dairy Hub and Kite Consultancy Question Time webinar on Wednesday.

Although hugely complimentary of Scottish dairy farmers, he said the industry was failing producers when some processors had closed their doors and there was no longer the capacity for increasing production.

“You have some fantastic dairy farmers in Scotland and new producers going into the industry who can’t get a contract, so end up having to sell their milk 100s of miles away south of the Border,” he said.

“Give Scottish dairy farmers an inch on volume and they’ll take a mile, purely because they are so good at what they do. If Scotland is serious about dairy, then its biggest brand must be allowed to invest for the greater good of Scottish milk fields,”

Instead, he said, local councils and Scottish Government should be encouraging future development which in turn, would lead to new products and possible exports.

“Who, in Scotland, is talking to Lactalis about why it isn’t doing in Scotland what Saputo have done in Cornwall? Or incentivising it to do so? Scotland could do for dairy what the Irish have done with dairy? There is no reason why it cannot,” he said.

Mr Walkland also hit out at local politicians and the Scottish government for hindering development – particularly at Graham’s Dairies, Bridge of Allan.

“What are the politicians doing? It is no good paying cheap lip-service on better farmer milk contracts if it does nothing to encourage more profitable processors.”

Commenting on milk prices, he said that Scottish values were on average, similar if not better than the UK as a whole since last AgriScot. However, there was still a huge differential between aligned and non-aligned – with aligned bagging £80,000 more per 1m litres compared to average Scottish non-aligned farmer since 2018.

He also pointed out that eight of the top 10 milk payers across the UK have cheese contracts, while those at the bottom of the league concentrate on the liquid milk market.

“Cheese is where the money is but where is Scotland’s cheese growth plan?,” said Mr Walkland.

AHDB chairman, Nicholas Saphir, also criticised the industry’s lack of investment in the sector. “Dairy returns in this country have lagged behind those of the best European dairy farmers’ for the last 10 years purely because the UK believes the liquid milk market produces the best margins.

“British dairying is very poor on new product development and imports a lot of value added products. Come January/February if a trade deal has not been agreed, the costs of importing such dairy products could be quite significant.”

With UK’s traditional cheap food policy, he said the only way to compete was to have a much more aligned milk supply chain and look more at export markets, giving the example of Kerry Gold butter, which is No 1 brand name in America.

“There is phenomenal opportunity for added value. You only have to look at the £4bn of cheese that is exported every year to France, Germany and Holland from the UK and there could also be a significant market in the US.

“The industry has got to look at adding value to its dairy products and promoting exports. We have a lot to do on marketing,” concluded Mr Saphir.