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Dairy leads the way as Irish agri-food exports top €11bn

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By Jim Cornall+

12-Jan-2017

The dairy sector was the leading contributor to Irish agri-food and drink exports, which exceeded €11bn for the first time in 2016.
The dairy sector was the leading contributor to Irish agri-food and drink exports, which exceeded €11bn for the first time in 2016.

Figures announced yesterday by Bord Bia, the Irish Food Board, show the value of Irish agri-food and drink exports exceeded €11bn ($11.7bn) for the first time in 2016, despite a small decrease in UK exports following Brexit and currency fluctuations.

The dairy sector led the way, with exports of €3.38bn ($3.6bn).

However, while dairy products & ingredients topped the list, growth was only 2%, compared with 9% for prepared foods.

Dairy sector

For the year, global dairy wholesale prices fell by over 10%. However, prices in the final quarter increased significantly.

The strongest performing category was specialized nutritional dairy powders while whey, whole milk powder and yogurt also recorded growth.

Despite higher volumes, the value of cheese exports declined by around 4% in 2016 to €675m ($717m). The UK accounted for more than 50% of cheese exports and trade into that market is estimated to have shown a double-digit decline due to unfavorable exchange rates.

However, Bord Bia said prospects for Irish dairy exports in 2017 look positive: Recovering global dairy prices and increased demand from key global dairy importers and anticipated stronger oil prices should help exports.

Brexit effect

Overall exports rose 2% compared to 2015. Bord Bia said that the 8% drop in UK exports was offset by 13% growth in international markets.

At the launch of Bord Bia’s Export Performance and Prospects 2016-2017 report, Michael Creed TD, Irish Minister for Agriculture, Food and the Marine, said that one of the highlights was the impact of market diversification in the year in the UK decided to leave the European Union.

While trade with the UK fell, “An overall increase of 13% in shipments to international markets, to reach a value of approximately €3.5bn ($3.7bn), was particularly remarkable," Minister Creed said. 

According to Bord Bia estimates, the volatility of sterling negatively affected the competitiveness of Irish exports, reducing the value of trade by a potential €570m ($606m).

The minister noted, however, that the UK will continue to be a critically important market for Irish agri-food products.

International markets

Padraig Brennan, director of markets, Bord Bia, noted that since 2010, international markets have accounted for half of the growth in total exports; Irish food and drink exports to China have increased six fold in six years, while exports to North America and the rest of Asia have doubled in the same period.

Bord Bia chairman Michael Carey said despite difficult trading conditions, it was encouraging to see the industry continuing to grow business and extend its global footprint to more than 180 markets around the world.

Bord Bia said that export markets look set to remain challenging in 2017 amid ongoing market uncertainty, but the upturn in global dairy demand is expected to continue.

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