Currency is likely to have the biggest impact on the dairy sector post-Brexit.

The possible ramifications of four alternative Brexit strategies would have on the UK dairy industry have been outlined in a report by Kite Consulting.

The report, which looks at potential Brexit outcomes for both a soft and hard Brexit, identifies the key factors that will be most affected by the type of Brexit the UK adopts. Currency clearly emerges as one of the biggest factors that will have an impact on the dairy sector at farm level.

John Allen from Kite Consulting said: “Brexit is the single biggest event to affect British agriculture for many generations. Its impact on trade relations, future farm support and access to foreign markets will be huge. In addition, currency is the elephant in the room that most other reports on Brexit are ignoring. We see this as being a major factor going forward and have aimed to model its impact at farm level.

“The Brexit route the UK adopts may not be at the very extremes of what we would classify as soft or hard, but somewhere on the spectrum, and to cover the multiple scenarios associated with these options would be impossible.

However, what is clear from the Kite report, is that there is only one scenario in which dairy farmers make the level of profit necessary for a sustainable business – the hard Brexit and a weak currency scenario. It is with this in mind that Kite will continue to talk to Defra, NFU and other key organisations about how to maintain a sustainable, efficient dairy industry.”