The British dairy industry is always evolving and changing. This is such a statement of the obvious that all take it for granted.

Change can creep up on us and we become a part of it. It is only by looking back that we can really understand the path we have taken. It’s a bit like the shock that comes with getting out some old family photographs: ‘Was that really us?’

Then, occasionally big things happen which really upset the apple cart. For agriculture, the last two big ones have been the War and becoming a part of the European Union. Now another is on the horizon; when and how will we leave the EU?

It is a law of cybernetics which requires that for stability, any system must fit its environment. Departure from the EU means that we will have to change what we do, and a rapid departure means that we will be forced to change just as fast, if we want to survive.

For dairying, one way of looking at Brexit is that we are moving from a market denominated in Euros to one based on the US Dollar. For instance, the value of butterfat is based on the price, in Euros, that a processor in places such as France or Belgium is willing to pay. Going forwards, it’s not clear whether we will still be able to cross the Channel with tankers of cream or whether we will have to look to a Dollar-based world market and compete with product from places such as New Zealand or Argentina.

We don’t know how exposed we will be after the protective blanket of the EU has been removed. Looking on the black side, it is quite easy to foresee a situation where our Government looks to cut expenditure by dropping subsidies and manage inflation by opening up the doors to food from the world market. These will be strong temptations.

There are many ways to prepare for the future if we hope to defend our industry, but three good places to look come under the headings of: Provenance, Quality and Efficiency. These are all about meriting a place in the market by being that bit different or that bit better than the rest.

The French really pioneered the concepts of Provenance and Terroir: every product has a story. The better the story, the more the product is insulated from competition. At the most basic level, supermarket-label cheddar could come from anywhere in the world, whilst branded farmhouse has its own identity and associated value. It’s not just a commodity to be sold on price and specification.

An excellent example is PDO Comté cheese. It can only be made in a specific area of the French Jura, mainly Franche-Comté. It can only be made by a recognised method, and can only be sold, graded and branded through a central marketing organisation, and on the farm:

• Only Montbéliarde or French Simmentals, with milking twice a day
• Minimum 1 hectare pasture/cow: maximum production 4600 litres/hectare
• No fermented forage, such as silage

So when it comes to breeding cattle, we should think carefully about the market we are aiming for; provenance and hybridisation just don’t go together.

This doesn’t mean that progress is banned. In fact, the Montbéliarde cattle society has been both a pioneer and leader in the application of genomic evaluation. Despite being a minor breed on the world stage, they have moved much faster than us in the UK. It’s the coherence of their overall strategy that has made this possible. Contrast this with the situation in the UK with breeds such as the Jersey. There is just as good a story to tell, but there’s no structure yet in place to give a platform for it to be told.

There are countless ways of looking at Quality. But as an example, let’s talk about fat.

It’s surprising just how little contact there is between cattle breeders and milk processors. Farmers have got the message that butterfat has a value; breeders know how to select for it; nutritionists know how to feed for it. But nobody seems to be thinking about quality.

Milk fat is produced by cows in the form of globules. These globules vary in size and can depend on the breed. Fat globules from Holsteins are, on the average, smaller than those from Jerseys.

A very significant proportion of the milk in this country is put through centrifugal separators to make cream. Very large fat globules can be a problem, as they are more fragile and more likely to rupture and so create free fat. This means it’s a lot harder to make good cream from Jersey milk than from Holstein.

Roughly, when cows produce higher levels of butterfat, either through breeding or feeding, the fat globules increase, not in number, but in size. So pushing up fat levels is not a good move if the aim is to make quality-cream. Furthermore, it is really not good if a naturally high-fat, high-saturate breed such as the Jersey is encouraged to produce even more fat and more saturates by feeding protected saturated fats based on palm oil (C16).

C16 will not melt in the mouth, so once it is no longer encapsulated in a globule, it simply won’t go away. The result can be a very unpleasant, unpalatable and greasy product. Everyone knows that feeling of needing a good hot cup of tea after a plate of greasy fish and chips. That’s not what you want from strawberries and cream.

Pumping up fat levels literally to bursting point by feeding saturates isn’t the right way to go if quality is the aim. On the farm, a sign that all is not well is butterpips in the milk filters. For the processor, fat losses to skim are increased. For the cream maker, it just gets too hard to make a good product. For the butter maker, the end result is rock hard and won’t spread.

Here are two examples of ways to improve the industry’s Efficiency, the use of Kappa Casein BB bulls and making drinking milk go further through protein standardisation.

Casein is the main protein building block in cheese. In milk, a whole range of molecules, mainly caseins, bundle together into a form resembling a new, still-furry, tennis ball. The technical term for this bundle is a micelle. The tennis ball comparison is widely used and is known as the hairy micelle model.

Casein comes in many forms, but Kappa Casein, which is found at the outer surface of the micelle, is very important in the cheese making process.

There are two main forms of the gene associated with Kappa Casein, which have been imaginatively called A and B. This means that cows can be AA, AB or BB.

Experiments, notably at the Hannah Research Institute (HRI) a good thirty years ago, showed that the B form is associated with firmer gels, faster rennet coagulation and better fat retention in cheese making. This puts BB at the top of the performance list, although only just ahead of AB, whilst AA comes in third.

In the annual review published by HRI in 1996, the data for cheese made from their Friesian milk showed fat retention as follows: AA 86.4%, AB 90.7%, BB 91.8%. This showed a clear preference for AB or BB. However, when it came to the cow population in their herd, the figures were: AA 64%, AB 32%, BB 4%. The conclusions at the time were simple. There was no downside to moving away from AA cows, so if the desire is to increase the efficiency of cheese production, priority should be given to BB bulls.

It’s fascinating that this knowledge is 30 years’ old, but it is only just starting to be applied. The main issue is money. There is no value to the liquid market, so there are no premia to be had there. Meanwhile, without the ability to easily check each cow in a herd, the big cheese makers haven’t really been able to get involved. It has only been those with a tightly managed milk supply that have been able to make any use of the knowledge. But, the advent of cheap genetic testing could see all of that change.

A second example of improving the industry’s efficiency is the potential for protein standardisation. For many years, the removal of fat from milk has been both routine and accepted. It had impeccable credentials from the beginning, when as now, the spotlight was on the nation’s waistline and fat reduction in drinking milk was seen as a good thing.

Whilst the standardisation of protein is now permitted within the EU for powders and condensed milks, it is not allowed in drinking milk. If such a move were to be made in a post-EU Britain, then the level might be set at that of powder, which is effectively about 3.25% for whole milk. Standardisation of market milk is already permitted in Australia, where the figure is set even lower at 3%.

In Australia, standardisation can be achieved in many ways, such as using microfiltration to take out large casein micelles for cheese making, adding permeate from ultrafiltration, adding lactose or simply and, almost incredibly for us, by the addition of water, so long as it originally came from milk.

It is unlikely that our Government would rush to make such a change, especially since protein, unlike fat, is seen to be on the list of good foods. Possibly, pressure could come from trade deals where the partner nation wishes to impose its protein standards as a part of an overall agreement.

If such a change were to come about, then all milk, including drinking milk, would be manufactured. The effect on the national dairy herd would be to encourage higher milk composition in order to reduce handling and processing costs. Jersey genetics would be in even greater demand.

At the outset, fat standardisation was a bonanza for the processors. But now, all the extra value has been handed back to the supermarkets, with the result being a national surplus of butterfat and a devaluation of the market for potted cream. But it could be said that not only are consumers getting cheaper milk as a result, but we are also generating butterfat at world-market prices.

There is nothing to say that protein standardisation of drinking milk won’t happen and with similar outcomes. Arguably, the domestic market for drinking milk would be subsidizing cheese production, making it cheaper and more competitive.

And finally, what does all of this mean for Trade?

All the developments and improvements that have been described and the many others that haven’t, are all leading to some simple conclusions.

If we think of our near-saturated domestic market alone, then we will need less cows to supply a similar quantity of dairy foods.

If we think we will have the same number, or even more cows, then we will have to look more closely at exports.

If we think that the rest of the world will see the UK as a place to dump surpluses, then we won’t need anything like as many cows as we have today.

There will always be a home market to supply, but we are not alone in wanting a slice of it. Meanwhile, years of under-investment mean that the UK is not set up for export on any scale. At the moment, we rely heavily on continental Europe and Ireland to process our surpluses. There simply hasn’t been the necessary commitment to processing capacity since the days of the Milk Marketing Boards (MMBs).On the other side of the equation, the bad news is that when we look at imports, we have a fully invested supermarket system which is willing and able to easily suck in goods from around the world.

Much will depend on the attitude and policies of our Government. We may return to the days of a protected market or we may discover that the attraction of cheap food will be just too tempting.

In conclusion ‘Hope for the Best and Plan for the Worst’.