Irish export boom led by dairy products and ingredients

By Ben Bouckley

- Last updated on GMT

Related tags Drink exports Bord bia Milk Butter

Strong dairy product and ingredient exports drove an 11% increase in the value of Irish food and drink exports during 2010, according to a new government report.

Published by the Irish Food Board (Bord Bia), Irish Food, Drink and Horticulture 2010-11 ​reports that the value of Irish food and drink exports increased by 11% to €7.88bn during 2010, a rise of over €800m on the year before.

Exports to the principal UK market totalled just over €3.4bn, 4% up on 2009 levels, with all major categories recording increases. Exports to other EU markets rose 14% to €2.66bn, helped by stronger dairy, prepared food, beverage and seafood exports.

Continental EU markets accounted for 34% of all food and drink exports, while Bord Bia estimates that 22% of exports (value €1.74bn) were international, with the strongest performing markets the Middle East, Russia, Asia, Australia and Africa.

The figures are especially welcome given Ireland’s recent economic woes, and Bord Bia attributes them to reduced exchange rate pressures, improved competitiveness for food manufacturers and higher prices for most global commodities.

“The strength of this performance is highlighted by the fact that, during the first nine months of 2010, food and drink exports accounted for 30% of the growth recorded in total merchandise exports,” ​said the report authors.

Dairy banker

One star turn was dairy product and ingredient exports, which increased by 17% to reach almost €2.29bn in 2010, helped by stronger prices, higher native production and the release of SMP and butter from storage.

European prices increased by 7-40%, with the strongest increases evident in butter and powders, “both of which had recorded significant falls in 2008 and early 2009”.

Milk output also “increased strongly” ​as the year progressed as better prices and good grass growth boosted output. “For the year, total milk deliveries are estimated to have increased by more than 6%.”

Although cheese production was up – while SMP and WMP output declined – prices recorded slower growth but withstood previous price falls better, leading to a general positive forecast from Bord Bia:

“Prospects for Irish dairy exports in 2011 remain generally positive with demand levels in key markets likely to help price levels. However, much will depend on supply levels from other exporters, most notably New Zealand and the US.

“Irish producers are better placed than most to withstand higher feed costs, given the predominantly grass-based form of production,”​ while a growing portfolio of products and markets is said to be “critical”​ as the pending end of the EU dairy quota will permit increased exports.

Lower seafood supplies boost prices

Seafood recorded strong rates, with “lower supplies across most species helping boost prices, while the exchange rate was more benign”. ​Overall exports increased by 18% to an estimated €370m, while prospects for 2011 “remain positive, with ongoing tight supplies expected in a number of major species, most notably salmon and oysters”.

Strong growth in other sectors saw meat and livestock exports grow 9% to around €2.44bn in 2010, with beef, live animals and pig meat performing well; food manufacturers also beat off rising input costs and price pressures from customers to deliver 8% growth to almost €1.4bn.

Edible horticulture and cereal exports were also “marginally higher”​ in 2010 at an estimated €200m with UK mushroom exports putting in a “robust performance”​.

Meanwhile cereal exports “improved strongly as the year progressed, while potato exports emerged driven by demand from Eastern Europe towards the end of 2010.

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