Irish food and drink exports had another strong year in 2017 with the highest ever volumes exported and their value exceeding €12bn for the second time ever, according to Bord Bia.

When non-food items such as forestry, animal hides/skins and horses, valued by DAFM at €1.5bn are added, the agri food sector represents €13.6bn of Ireland’s exports in 2018.

  • The dairy industry returned a strong performance with exports volumes increasing by 5% on 2017 though value remained similar at €4bn, one-third of total exports. Beef exports in 2018 stood at €2.5bn, a slight increase of 1%, with production having increased 3% to 633,000t. Sheepmeat sales returned a 15% increase on the previous year’s value to €315m even though slightly less volume (down 2%) was exported.

  • Pigmeat export values fell 6% to €666m though volume of pigmeat production increased 4%, reflecting significant price falls over the year. Poultry production increased by 3% to 157,000t with an increase in export value of 8% to €316m.
  • Live exports were down in value by 8% in 2018 despite an increase in numbers of animals exported. This is because there was a surge in calf exports, up 56% to 156,000 head, and a corresponding drop in numbers of higher-value finished cattle. There was also a drop in the value of stores and weanlings as well as finished cattle in 2018.
  • Value-added prepared foods were down 16% in value to €1.9bn, beverages down 1% to €1.5bn, seafood down 13% to €562m and horticulture and cereals down 10% to €208m.
  • Aside from the value of Irish food and drink exports to the economy, 173,000 people were employed by the industry in 2018 to process the produce generated by Irish farmers, which is an increase of 10,000 since 2010.

    • Focus on dairy

    Despite the weather-related difficulties for farmers in 2018, the dairy industry continued to grow, increasing export output by 5% on the previous year.

    Despite more produce, the value of exports remained the same at €4bn due to a combination of markets, currency and a change of accounting procedure at a major company.

    Farmers experienced a 7% drop on average in milk prices. At an EU level, November prices were 4.8% lower than in November 2017.

    Markets

    The UK remained a core destination for dairy exports, with sales there up 6% to €1.03bn on the previous year as were sales to the rest of the EU, also up 6% on 2017 to €1.35bn.

    The increase in UK sales reflected the amount of liquid milk and cream being processed in Northern Ireland for liqueur production as well as a growth in milk powders and whey.

    The North American market performed strongly, with butter in particular displaying strong growth, increasing sales by 90% on 2017 levels to €161m.

    Cheese exports to the US also increased by 20% in an overall dairy market that was worth €366m in 2018, an increase of 36%.

    Butter

    Butter was the star performing dairy product in 2018, with export sales topping €1bn for the first time. This represents an increase in sales value of 22% on the previous year and an increase in volume sales of 8.5%.

    Value is being added through shipping more butter in pre-packed alufoil and less in bulk packs than previously.

    Values peaked at €5,500t in May 2018, falling back to €3,300t at the end of the year, but overall demand is expected to remain strong in 2019 as butter benefits from consumers switching from vegetable fats.

    Cheese

    Cheese exports made up €800m of dairy exports in 2018, a 2% decline on the previous year with a drop in volumes of 4.5%.

    Production volume hasn’t dropped, which suggests stocks are being held in Ireland for maturing with less stored in the UK.

    While the UK is the main destination for Irish cheddar, taking half of production, other markets, particularly in Asia, are growing.

    Japan grew to a €27m cheese market in 2018, up 49% on the previous year, while China, a 120,000t market in 2018 taking just 1,000t of Irish cheese, is a target market for growth.

    Outlook

    With global production increases in 2019 unlikely to match growth in global demand, according to Rabobank, and relatively low stock levels, there is a reasonably positive outlook for the industry in 2019.

    Huge uncertainty is created by Brexit as the UK takes a quarter of all dairy exports and there is a huge cross-border element in the Irish dairy processing industry.

    Further value added categories

    Prepared consumer foods were worth €2.5bn and reflected within the overall meat, dairy and seafood sectors, a decline of 10% on the previous year.

    The prepared foods category is a standalone category worth €1.9bn in 2018, which represents 15% of all food and drink exports for the year and is down 16% on 2017 levels.

    The largest part of this category is enriched milk powders including bulk specialised nutritional powder preparations. Exports of these increased 6% in 2018 to 330,000t and were worth €707m, a 1.4% decline on the previous year.

    Africa remains a key market, with enriched milk powder sales there worth €220m in 2018 which was down 12% on 2018 levels due to better alternative markets being found and sluggish economic performance in the main export markets in west Africa.