Falling value of sterling not good news for Irish exporters
Comments made this week by Mark Carney, governor of the Bank of England, sent sterling to 12-month lows against the euro.

The value of sterling nosedived this week after governor of the Bank of England Mark Carney ruled out a rise in UK interest rates in 2016, citing weak economic growth in the UK and the continuing turmoil in global financial markets.

Sterling fell to more than £0.77 against the euro after Carney’s announcement, its weakest point against the single currency in over a year. With €4.4bn or 41% of Irish food exports sent to the UK last year, the sudden depreciation of sterling against the euro will be a major concern for Irish exporters.

Boosted

The weakness of the euro against sterling throughout 2015 served to boost the competitiveness of Irish exports on UK shelves. Irish food and drink exports to the UK grew by 7% in 2015, with the greatest driver of this undoubtedly the favourable currency tailwinds.

The euro weakened by almost 11% against sterling at one point in the year, with the single currency particularly weak during the period between early March and late August 2015.

However, with global markets in turmoil since the start of 2016 amid concerns over an oil supply glut and the economic health of China plaguing investors, the Bank of England governor has decided to hold his position and wait before any rise in UK interest rates.

Carney said the time was not right for a rise in interest rates, as UK growth would be too weak in 2016, especially set against the backdrop of the present fragility in the global economy.

The impact of the news saw the value of sterling fall against both the euro and the US dollar on Tuesday this week, an outcome clearly intended by Carney and welcomed by UK markets, as a weaker pound will only help UK exports.

Bearish outlook

Coupled with Carney’s bearish economic outlook, the uncertainty around a British exit from the euro zone will only intensify over the coming months as we move closer to a referendum date (possibly sometime in summer 2016), meaning the weakness of sterling could be here to stay for an extended period.

Should this be the case, Irish food and drink exporters will find themselves operating in more challenging market conditions with much of the competitive advantage enjoyed over the last 12 months wiped away.

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Weak euro helps Irish food exports grow by 3% to €10.8bn

EXCLUSIVE: Glanbia states position on LacPatrick
Glanbia, one of the possible suitors for LacPatrick, has made a statement to the Irish Farmers Journal. Eoin Lowry and Thomas Hubert report.

"Glanbia Ireland decided, having considered the LacPatrick situation alongside our current strategic priorities, not to engage any further in the process," a spokesperson for Glanbia has told the Irish Farmers Journal.

"Glanbia confirms therefore that, except for an initial evaluation of the situation, the company has not made any formal submission or bid in respect of LacPatrick. We wish them every success for the future," the spokesperson added.

Lakeland, Dale Farm and Aurivo are the other processors who received initial financial reports from LacPatrick, after the co-op invited interested participants to merger talks at the end of April.

The board of LacPatrick said it was open to consolidation after receiving notice from members threatening to leave the co-op following a price cut.

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LacPatrick open to merger talks

LacPatrick preparing financial report for suitors

The bids are in for LacPatrick

Over 8,000 farmers use our technology – James Creevy, Herdwatch
We caught up with James Creevy from Herdwatch at the Irish Farmers Journal's industry day that was held last week on Tullamore Farm.

Creevy explained what Herdwatch does and why it is a benefit to farmers. Herdwatch is now the number one farm management app in Ireland and there are over 8,000 farmers using the technology across Ireland and the UK.

Herdwatch was started in Roscrea, Co Tipperary in 2011 by Fabien Peyaud. His initial research, backed by FRS Farm Relief Services and CEO Peter Byrne, showed that over 90% of cattle farmers did not use any form of herd management software.