Despite COVID-19 turning markets and supply chains on their heads, Irish agriculture produced, processed and distributed €13bn worth of food and drink in 2020. It is a phenomenal achievement and shows the strength, resilience and agility of the sector.
While contracting slightly for the first time in recent years – down 2% on 2019 – Bord Bia figures show the value of Ireland’s food and drink exports have grown 47% in 10 years. It has largely been fuelled by expansion in the dairy herd. Valued at €5.2bn in 2020, dairy exports are double what they were a decade ago. The competitiveness of the sector is evidenced by the growth achieved in non-EU markets, particularly in Asia, Middle East and North Africa, while the value and quality proposition is reinforced by the continuous growth in exports to the US despite a 25% tariff wall.
The latest Bord Bia data also shows the changing face of Irish agriculture. While the dairy sector surges, beef exports in 2020 fell to below €2bn for the first time since 2013. Five years ago, dairy exports, in value terms, accounted for 30% of total food and drink exports with beef exports accounting for 20%. Now dairy accounts for 40% with beef at just 14%.
Bord Bia CEO Tara McCarthy
This decline in value and relevance of beef exports comes in advance of the fallout from Brexit. Its exposure is clear with the UK market consuming 44% of beef exports in 2020. However, in an interview in this week's edition, Bord Bia CEO Tara McCarthy is upbeat on the ability of Irish beef to protect its market share in the face of competition from cheaper imports. She identifies doubling down on sustainability as key to ensuring British buyers do not opt for lower priced options.
Farmers will welcome McCarthy’s optimism but they will also measure the success of Bord Bia against its ability to turn optimism into reality. This will require a strategy that protects the market share and the value of Irish exports into Britain. The scale of the challenge should not be underestimated with the 2020 data showing the extent to which Bord Bia’s market premiumisation strategy for beef is currently being tested.
As global access barriers to the UK food market begin to crumble, Ireland will have to make a decision on beef strategy
In 2020, beef exports totalling 550,000t were valued at €1.9bn. In 2015, exports totalled 500,000t but were valued at €2.41bn. Over the period, a 10% increase in volume was matched by a 21% decline in value.
A number of structural factors will have influenced the trend beyond the disruption caused by COVID-19. An increased percentage of the national cattle kill of dairy origin plus a decline in the value of sterling are both contributing factors. But are there market forces at play? Does the trend expose the true cost of a move to re-nationalise premium beef markets in Britain and within many of our main EU export destinations?
It is a move that has seen Irish beef either pushed off or have a reduced presence on retail shelves. Regardless of the reason, a scenario where volume is growing while value declines challenges any narrative around the success of a market premiumisation strategy for Irish beef. It is a trend that is too important to simply ignore.
There is no doubt that as global access barriers to the UK food market begin to crumble and as EU markets continue to re-nationalise, Ireland will have to make a decision. One is, as McCarthy points out, to double down on sustainability and our grass-fed message. It is in the belief that British and EU consumers will pay a price for environmental sustainability that will deliver economic sustainability for Irish farmers. Given our starting position, it is a solid approach.
But if Britain and the EU continue to move towards global prices for beef imports at the same time as the EU maintains unique internal production constraints, then an alternative strategy that supports a restructuring of the beef sector will be required. The focus being to develop the most efficient production model at farm level matched to the environmental objectives set out in the Farm to Fork strategy. Both the sustainability and restructuring strategies require careful consideration. The scenario that must be avoided is one where farmers incur the costs of producing a premium product only to receive a commodity price.
\ Jim Cogan
Tillage: push towards gene editing not a surprise
The proposal by England to free up constraints on gene editing is hardly surprising. The UK had long been one of the main voices for a reconsideration of breeding technologies in the EU, so a public consultation process on the topic, which is to begin now post-Brexit, was anticipated.
While this consultation refers to plant breeding only, the technology will also be of interest in animal breeding and human genetic diseases. The consultation process acknowledges that gene editing carries many potential benefits for mankind by helping to minimise genetic deficiencies in cropped plants while helping to reduce dependence on inputs which may impact on our environment and wildlife.
Progressing with this technology following the 10-week consultation could be the first significant departure of British agriculture from EU policy. Going this route could have consequences for this island unless EU regulations are altered following its current evaluation process.
The English plant breeding sector has long been important for Irish farmers and bringing new technologies into plant breeding could mean their varieties will no longer be available here. Similar difficulties could arise for other crops like fodder seeds, catch crops and potatoes.
If gene-edited crops go into commercial production in Britain, their export to this island is likely to be prevented in the medium term.
Ireland has secured €1bn from the EU Brexit Adjustment Reserve (BAR). The temptation to provide short-term top-up payments should be avoided. Instead, farmers need to come forward with a clear and detailed investment strategy that will protect farm incomes should the value of the UK food market be eroded in the years ahead. Investment should not be limited to the BAR. Additional funds should also come from the Government’s €5.5bn recovery and contingency fund, set aside in the budget, plus farmers should seek support from other EU sources, particularly the €17.5bn EU Just Transition fund.
There now exists a unique opportunity to build a significant fund outside of the CAP to invest in supporting farmers adjust to the new trading and environmental landscape. If it is to be secured, we need to present to the Government and EU a very clear investment strategy for the sector – one that demonstrates a long-term economic vision with clear environmental dividends.
BDGP: important that farmers avail of extension
The Beef Data and Genomics programme (BDGP) got off to a difficult start in 2015. It stirred up lots of emotion in relation to influencing breeding decisions on farm.
Some farmers opted out of it for this reason but we cannot ignore that the BDGP has delivered almost €240m to suckler farmers. The scheme has also delivered on the ground through better calving intervals, more calves per cow per year, and a reduction in average age at first calving. It is being rolled over in 2021 with the closing date for applications on Friday. In the context of the income situation of suckler farms and in building momentum behind further supports under the next CAP, it is important that farmers avail of the extension.
Sheep: more in the markets than we think?
A point that should not be missed in the context of the Bord Bia export figures is the fact that dairy exports into the US have continued to grow despite the imposition of a 25% import tariff. It raises the question as to the level of market intelligence on price elasticity. Clearly consumer demand has been much less sensitive to price than thought. The same applies for the sheepmeat sector where consumer demand remains strong despite the record prices returned to farmers. Sheepmeat processors and Ornua have done a good job in extracting this added value from the market – the challenge now is to make sure it is maintained.
Despite COVID-19 turning markets and supply chains on their heads, Irish agriculture produced, processed and distributed €13bn worth of food and drink in 2020. It is a phenomenal achievement and shows the strength, resilience and agility of the sector.
While contracting slightly for the first time in recent years – down 2% on 2019 – Bord Bia figures show the value of Ireland’s food and drink exports have grown 47% in 10 years. It has largely been fuelled by expansion in the dairy herd. Valued at €5.2bn in 2020, dairy exports are double what they were a decade ago. The competitiveness of the sector is evidenced by the growth achieved in non-EU markets, particularly in Asia, Middle East and North Africa, while the value and quality proposition is reinforced by the continuous growth in exports to the US despite a 25% tariff wall.
The latest Bord Bia data also shows the changing face of Irish agriculture. While the dairy sector surges, beef exports in 2020 fell to below €2bn for the first time since 2013. Five years ago, dairy exports, in value terms, accounted for 30% of total food and drink exports with beef exports accounting for 20%. Now dairy accounts for 40% with beef at just 14%.
Bord Bia CEO Tara McCarthy
This decline in value and relevance of beef exports comes in advance of the fallout from Brexit. Its exposure is clear with the UK market consuming 44% of beef exports in 2020. However, in an interview in this week's edition, Bord Bia CEO Tara McCarthy is upbeat on the ability of Irish beef to protect its market share in the face of competition from cheaper imports. She identifies doubling down on sustainability as key to ensuring British buyers do not opt for lower priced options.
Farmers will welcome McCarthy’s optimism but they will also measure the success of Bord Bia against its ability to turn optimism into reality. This will require a strategy that protects the market share and the value of Irish exports into Britain. The scale of the challenge should not be underestimated with the 2020 data showing the extent to which Bord Bia’s market premiumisation strategy for beef is currently being tested.
As global access barriers to the UK food market begin to crumble, Ireland will have to make a decision on beef strategy
In 2020, beef exports totalling 550,000t were valued at €1.9bn. In 2015, exports totalled 500,000t but were valued at €2.41bn. Over the period, a 10% increase in volume was matched by a 21% decline in value.
A number of structural factors will have influenced the trend beyond the disruption caused by COVID-19. An increased percentage of the national cattle kill of dairy origin plus a decline in the value of sterling are both contributing factors. But are there market forces at play? Does the trend expose the true cost of a move to re-nationalise premium beef markets in Britain and within many of our main EU export destinations?
It is a move that has seen Irish beef either pushed off or have a reduced presence on retail shelves. Regardless of the reason, a scenario where volume is growing while value declines challenges any narrative around the success of a market premiumisation strategy for Irish beef. It is a trend that is too important to simply ignore.
There is no doubt that as global access barriers to the UK food market begin to crumble and as EU markets continue to re-nationalise, Ireland will have to make a decision. One is, as McCarthy points out, to double down on sustainability and our grass-fed message. It is in the belief that British and EU consumers will pay a price for environmental sustainability that will deliver economic sustainability for Irish farmers. Given our starting position, it is a solid approach.
But if Britain and the EU continue to move towards global prices for beef imports at the same time as the EU maintains unique internal production constraints, then an alternative strategy that supports a restructuring of the beef sector will be required. The focus being to develop the most efficient production model at farm level matched to the environmental objectives set out in the Farm to Fork strategy. Both the sustainability and restructuring strategies require careful consideration. The scenario that must be avoided is one where farmers incur the costs of producing a premium product only to receive a commodity price.
\ Jim Cogan
Tillage: push towards gene editing not a surprise
The proposal by England to free up constraints on gene editing is hardly surprising. The UK had long been one of the main voices for a reconsideration of breeding technologies in the EU, so a public consultation process on the topic, which is to begin now post-Brexit, was anticipated.
While this consultation refers to plant breeding only, the technology will also be of interest in animal breeding and human genetic diseases. The consultation process acknowledges that gene editing carries many potential benefits for mankind by helping to minimise genetic deficiencies in cropped plants while helping to reduce dependence on inputs which may impact on our environment and wildlife.
Progressing with this technology following the 10-week consultation could be the first significant departure of British agriculture from EU policy. Going this route could have consequences for this island unless EU regulations are altered following its current evaluation process.
The English plant breeding sector has long been important for Irish farmers and bringing new technologies into plant breeding could mean their varieties will no longer be available here. Similar difficulties could arise for other crops like fodder seeds, catch crops and potatoes.
If gene-edited crops go into commercial production in Britain, their export to this island is likely to be prevented in the medium term.
Ireland has secured €1bn from the EU Brexit Adjustment Reserve (BAR). The temptation to provide short-term top-up payments should be avoided. Instead, farmers need to come forward with a clear and detailed investment strategy that will protect farm incomes should the value of the UK food market be eroded in the years ahead. Investment should not be limited to the BAR. Additional funds should also come from the Government’s €5.5bn recovery and contingency fund, set aside in the budget, plus farmers should seek support from other EU sources, particularly the €17.5bn EU Just Transition fund.
There now exists a unique opportunity to build a significant fund outside of the CAP to invest in supporting farmers adjust to the new trading and environmental landscape. If it is to be secured, we need to present to the Government and EU a very clear investment strategy for the sector – one that demonstrates a long-term economic vision with clear environmental dividends.
BDGP: important that farmers avail of extension
The Beef Data and Genomics programme (BDGP) got off to a difficult start in 2015. It stirred up lots of emotion in relation to influencing breeding decisions on farm.
Some farmers opted out of it for this reason but we cannot ignore that the BDGP has delivered almost €240m to suckler farmers. The scheme has also delivered on the ground through better calving intervals, more calves per cow per year, and a reduction in average age at first calving. It is being rolled over in 2021 with the closing date for applications on Friday. In the context of the income situation of suckler farms and in building momentum behind further supports under the next CAP, it is important that farmers avail of the extension.
Sheep: more in the markets than we think?
A point that should not be missed in the context of the Bord Bia export figures is the fact that dairy exports into the US have continued to grow despite the imposition of a 25% import tariff. It raises the question as to the level of market intelligence on price elasticity. Clearly consumer demand has been much less sensitive to price than thought. The same applies for the sheepmeat sector where consumer demand remains strong despite the record prices returned to farmers. Sheepmeat processors and Ornua have done a good job in extracting this added value from the market – the challenge now is to make sure it is maintained.
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