Dairy can compete henceforth, utilising recent negotiations initially (5)
I believe the answer is:
Here is my best explanation:
'dairy can' is the definition.
'compete henceforth utilising recent negotiations initially' is the subsidiary indication.
'initially' indicates taking the first letters.
The first letters of 'compete henceforth utilising recent negotiations' is 'churn'.
(Other definitions for churn that I've seen before include "Stir vigorously", "Large milk vessel", "There may be agitation in this", "in which butter's made", "large milk can", "boil", "Heave", "Shake", "Butter-making machine" and "Kind of cask butter is made in".)