We’re being encouraged to plan for a ‘no-deal’ Brexit, but exactly how a dairy farmer can do this escapes me. Of course, planning is one thing; being prepared is something very different.

As October 31 draws ever closer, the reality of what it means to leave our biggest and closest trading partner without agreement or transition period is beginning to dawn.

The UK dairy industry exports only a relatively small quantity of dairy produce – the equivalent of 18 per cent of total UK production – but the vast majority of this, 90 per cent by volume, goes to our EU neighbours.

As net importers you may ask, ‘what’s the problem?’ Simply become more self-sufficient and import less... The main issue is that we’ve become good at exporting the low-value commodities, such as powder and cheddar cheese, while importing higher value products such as spreads, soft cheeses and desserts.

If we leave the EU with no agreement in place, we’ve overnight become a third country and, as such, subject to tariff barriers to access our established EU markets.

The Government has indicated dairy tariffs will average around 35 per cent depending on the product being traded.

This being the case you’d expect the Government to set import tariffs on similar products at the same rate, thus protecting domestic supply. Well, you’d be wrong.

To date, our own Government has indicated it’s likely there will be zero per cent import tariffs for dairy products from the EU as well as other major dairy exporting countries such as the USA, Australia and New Zealand.

What will this mean for the UK dairy industry? Several issues will arise almost immediately on Friday November 1.

Firstly, much of the trade the UK does with our EU neighbours is across the Irish border. Over the past couple of decades an increasing amount of fresh milk has crossed into the republic every day for processing, some of which then returns as product – all tariff free.

From the beginning of November, with the tariffs proposed, this will become immediately uneconomical, meaning all the milk produced in Northern Ireland will have to be either processed there or, more likely, due to the lack of processing facilities, be shipped over the Irish Sea.

The problem doesn’t end there. We still have the steep export tariffs, so somehow we’ll need to absorb all the extra product into the UK market – while also competing with dairy imports at zero per cent tariff. It’s difficult to estimate what this may do to farm gate prices, but as we’ve seen in the past relatively small changes in dairy commodities can affect prices by as much as 30 per cent.

It’s anyone’s guess how the combination of losing our main export market while also inviting imports tariff free will play out in terms of farm gate prices but it’s worth noting that every one penny per litre movement in price costs the industry £140m.

One solution could be to reduce the national herd by say a minimum of 20 per cent – not ideal as our tastes wouldn’t have changed and we’d still be importing as much dairy as ever and would have an even larger trade deficit.

Another longer-term solution would be to find and establish trade deals in replacement overseas markets taking up the surplus ex-EU product – again not ideal as trade agreements tend to take years and a prolonged period on World Trade Organisation arrangements or similar tariff barriers with the EU would be enormously challenging for what is already an extremely marginal industry.

It’s very frustrating when we already have a functioning and fair trading relationship with the EU. The first thing we’ll have to do on November 1 is sit down and sort out a new deal from a much maligned position.

n Robert Craig is a large-scale farmer with three dairy farming businesses. He farms around 2,000 acres with almost 1,500 cows across Cumbria and in Northumberland.