In its latest report,Export Performance & Prospects Irish Food, Drink and Horticulture 2013/14, Bord Bia detailed an estimated 15% increase in the value of dairy product and ingredient exports last year – from €2.64bn ($3.56bn) in 2012 to €3.045bn ($4.15bn) in 2013.
It found that the UK was the largest single export market for Irish dairy, accounting for 37% of all dairy products and ingredients that left the Republic of Ireland.
The value of Irish dairy shipments into Britain grew by 15% last year to around €1.1bn ($1.5bn), according to the Bord Bia report, with the “strongest performances…evident in butter and cheese.”
"Lower trade to the US"
The value of Irish dairy exports to mainland Europe in 2013 also increased, by “more than a quarter” to €875m ($1.19bn). Bord Bia pinpointed increasing demand for Irish cheese and butter in Belgium, France, Germany, Italy and the Netherlands as the key driver of this growth.
Mainland Europe now accounts for 29% of Irish dairy exports, the report said – an increase on the 26% recorded in 2012.
This increase came at the expense of markets outside of Europe, which now account for 34% of Irish dairy exports – down from 38% in 2012.
“The value of exports to international markets did not rise in line with the EU with only a marginal increase evident to reach just over €1bn,” said the Bord Bia report.
“Significant increase in the value of exports to China, Hong Kong Malaysia and Vietnam offset lower trade to the US, Saudi Arabia and South Africa.”
Infant formula sales "static"
Across the board, the strongest performing categories were butter, cheese, infant formula, milk and cream, whole milk powder (WMP) and whey, said Bord Bia.
Despite increasing Asian demand for infant formula products, the overall volume of infant formula sold was “relatively static,” it said.
“Infant formula exports increased due to a significant increase in the value of sales to China, Hong Kong and Vietnam offsetting declines to some Middle Eastern markets."
The value of Irish butter export trade was “boosted by significant volume increases to Belgium, France and Germany.” Cheese, at €725m ($987m), now accounts for almost a quarter of all Irish dairy exports.
“Cheese exports performed well to the UK, Germany, Netherlands, Italy, Russia and some Middle Eastern markets,” said Bord Bia.
Irish dairy prospects
Looking ahead to 2014, Bord Bia predicted that based on recent activity on the Global Dairy Trade (GDT) auction, international demand for dairy product should be strong in the next twelve months.
“The prospects for Irish dairy exports in 2014 remain broadly positive with global demand likely to help clear any increase in output to keep prices well ahead of averages," it said.
"Global stock levels are the relative strength of the euro will largely determine price prospects. Some further growth in output is likely as producers gear up for the removal of quotas in 2015."