Currently, there free movement of raw milk and products across the border into both the North and the Republic of Ireland.
However, following the UK’s decision to leave the EU, this free movement could be halted.
It is therefore essential that a two way access for raw milk and dairy products should be maintained between Northern Ireland and the Republic of Ireland without tariffs and free from burdensome non-tariff administrative measures, the report found.
The Dairy UK report looked at Lakeland Dairies as a case study for the report, a co-op that manufactures a range of dairy based products in the North and the Republic, selling in 77 countries globally.
Approximately 1.2 billion litres of milk is produced by 2,400 family farms across the island supplying the co-op.
Over a 20-year period, Lakeland has grown its milk volumes to 550m litres in Northern Ireland and £150m has been invested in manufacturing facilities both sides of the border.
It directly employs 350 people in Northern Ireland/UK, this the report said is on the assumption of no borders and unrestricted movement of milk raw material and finished products across the island of Ireland.
This enables operational efficiency and excellence along the entire supply chain, according to Dairy UK.
As the Brexit negotiations start, the report found that it is important to remember that free two way movement of raw material milk and finished product is mission critical to align processing capacity and product capability across the milk field to optimise efficiency and competitiveness.
The report outlined the additional challenges of customer friendly labelling and certification of products with Northern Ireland and Republic of Ireland milk, veterinary and health certification, alignment of food manufacturing standards between the EU, the UK and the rest of the world.
It is also critical to have local movement of people and access to skilled labour as well, continuance of Free Trade Agreements so as to avoid trade disruption and tariffs.
Lastly, in order to operate successfully, the report found that the dairy industry needs continuing financial farm support to ensure farmer viability and security of supply as well as continued access to sustainable energy sources at competitive cost.