There are two standout numbers in the annual ifac food and agribusiness report for 2025, which was launched at the Ploughing this week.

The first is that 80% of business leaders surveyed for the report are optimistic about their company’s performance over the next 12 months, one of the highest readings in the report going back to 2018.

The second is that 44% of businesses have delayed investment due to uncertainty caused by rising input costs and tightening margins, coupled with concerns around trade tariffs and Government policy.

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David Leydon, group head of growth and agrifood at ifac, said that for many the cost of doing business remains a central concern: “Staff turnover, overheads and energy volatility influenced by geopolitics and trade disputes, including tariffs are all impacting.”

The survey breaks down the challenges showing that 60% of businesses say the cost of inputs is the biggest challenge to growth, with 48% citing uncertainty about Government policy, trade and tariffs, while 40% said staff shortages remain a headwind.

This might leave the reader wondering where the optimism is coming from, but the survey also answers that, with 57% saying they see the launch of new products or services driving growth, almost half of companies seeing demand increasing and a third expected exports to new countries to lead to further expansion.

While 80% of businesses saw an increase in costs over the past year, only 23% saw a fall in net profit, suggesting that the sector has been very good at either passing those extra costs on to customers or have found ways to increase sales. Only 11% of companies surveyed saw a drop in turnover during the last 12 months.

Exports

Due to the relatively small size of Ireland’s domestic market, the country’s food and agri businesses often look to the export market to increase sales. According to the report, 24% of companies surveyed rely on exports for more than half of their sales.

While the key markets are our closest neighbours – the UK and the EU – there is significant exposure to the US and the rest of the world.

The UK has the benefit of proximity, but also the long-established trading links between the countries and the increased ease of doing business in the wake of the implementation of the Windsor accord.

The EU also has long-established links, is a common trading area and uses the same currency, making it the lowest possible risk destination for Irish exports.

For exports to the UK and the rest of the world, there is the added risk of exposure to currency movements.

The ifac report found that 70% of companies are not exclusively invoicing in euro, and 21% do not actively managed currency risk.

The makes some suggestions about how to manage that risk, including making use of options and futures (see page 32 for more on these instruments).

Clearly the other biggest risk to trade is the current uncertainty around tariffs. While the EU-US trade framework outlines a 15% or most-favoured-nation level for tariffs (whichever is larger), that deal could see some changes from court challenges in the US. The increased trade recently tensions between the EU and China, with the Asian nation imposing tariffs on EU porkmeat in response to the move from Brussels on Chinese EVs, also has the potential to widen further.

Comment

Running a food or agri business is much like running a farm, in that it is to some extent an exercise in optimism. The latest annual ifac agribusiness report highlights this very clearly.

Looking at the report, which shows almost half of Irish food and agri businesses are holding back on investments, while highlighting the range of challenges faced by the industry, it would be easy to think that business leaders would be very cautious about the future. And yet, 80% of them say they are optimistic. Perhaps because they have come through so many challenges in recent years like Brexit, the pandemic and the supply chain crisis, they have learned how resilient their business really is.

That optimism is the most important asset for Irish food and agri businesses at the moment.

The biggest driver of business expansion is the willingness to take risks, and only leaders who are optimistic about the future will take those risks.