Figures released by Bord Bia show the value of Irish food and drink exports reached €12.6bn in 2017. As Amy Forde reports, this represents a 13% increase on the year previous and a 60% or €4.7bn increase since 2010.

The record-breaking export figures achieved over the last eight years once again demonstrate the importance of the agri-food sector to the national economy. But this only tells part of the story. With the sector sourcing in excess of 90% of the inputs required from within the Irish economy, the net contribution to the country is a multiple of other manufacturing sectors. Economic analysis indicates that for every €100 in exports, the net foreign earning from the agri-food sector is over €50. This compares to just €19 for other manufacturing sectors including modern economy sectors such as pharma and ICT.

From an industry perspective, the Bord Bia figures are clearly a positive – achieving growth is important in improving the relevance of the sector at political level, encouraging ongoing investment and attracting and retaining talent.

2017 saw the main sectors achieve the ultimate win-win of both volume and value growth. A 6% or 500m litre increase in Irish dairy production combined with between 25% to 30% increase in the farmgate price delivered a 19% increase in the value of dairy exports. It is a phenomenal achievement and perhaps the best example yet as to the extent to which the value of the Irish dairy sector was being curtailed by quotas.

Meanwhile, the pigmeat sector recorded a 14% increase in the value of exports due to a 3% increase in volume and an 11% increase in price.

Even in the case of the beef sector, a 4% increase in the volume was not enough to dampen the trade, with Bord Bia figures showing prices to have increased by 1% per tonne in 2017. What is most interesting about the beef sector is just how valuable the offal market has now become – with many of the products that were once considered a liability now attracting a premium on international markets.

Having increased by 9% to total €230m, the typical value of offal harvested from a beef animal by Irish processors is in the region of €135. It is an income stream for the processing sector that many farmers do not fully appreciate as the offal is harvested prior to the carcase being weighed. Traditionally, the value of these offal products has been downplayed by the industry. Bord Bia deserve credit for finally shedding some light on just how valuable this market has become. In the case of sheepmeat, a strong trade for new-season lamb combined with a 14% growth in output delivered a 12% growth in the value of sheepmeat exports.

It is encouraging to see that in the case of both the dairy and pigmeat sectors that the farmers fuelling this impressive growth benefited. Just before Christmas, the Teagasc annual review and outlook conference showed pig farmers to have returned a net margin of €260 per sow, while dairy farmers should see net margin per ha double to €1,800. Unfortunately, Teagasc does not anticipate suckler farms seeing much benefit from the 5% growth in beef exports, with an average loss of €10/ha forecast for 2018.

Overall, Bord Bia presents a largely positive forecast for 2018 albeit highlighting the risks around Brexit. But what is clear from our export performance in 2017 is that developments in China will ultimately play a key role in turning positive forecasts into reality. Now consuming over 30% of world pigmeat production and accounting for 37% of Ireland’s non-EU dairy trade, demand from the Chinese market will have a major impact on farm gate prices in Ireland.

China could also hold the key to unlocking the potential of our beef industry. As Phelim O’Neill reports, progress is being made but at a slow pace. No doubt both Bord Bia and the Minister will be disappointed that the various trade missions they embarked on in recent years have yet to deliver for beef.

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