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Sterling has weakened further against the euro this morning, now trading at a rate of 83p to €1. This puts further pressure on Irish sales to the UK, while the opposite applies in Northern Ireland with sales to the eurozone made easier as European buyers have more money to spend.
The implications of Brexit is the main topic of news discussion programmes today as the reality continues to sink in. For the Irish agri-food industry, there is also uncertainty, but it won’t be the end of the commercial world.
The immediate issue is the weakening of sterling. However, currency volatility is not new. In 2009, the rate of exchange reached 95p to €1 and, in the five years between 2009 and 2013, the euro traded at a rate of 85p to €1 for four of the five years. This period coincided with strengthening beef prices, though with general production costs increasing at the same time, not all of the gains went to farmer profitability.
What this demonstrates is that while currency volatility is unwelcome for exporters, it is a business challenge that has been successfully managed in the past and, hopefully, can be managed again this summer.
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