Bord Bia figures show healthy dairy sector in Ireland
The growth in dairy exports, up 4% overall, occurred in the face of an adverse trading environment and reflects the growth in the volume of specialist nutrition powders, which increased by 25% overall, and by 40% to China alone.
Bord Bia also published its new Statement of Strategy, 2016 – 2018, “Making a World of Difference.”
Padraig Brennan, Bord Bia director of markets told DairyReporter that the dairy volumes were very healthy.
“There’s a couple of things, we’ve seen a very substantial increase in milk volumes produced in Ireland during 2015 – the liters of milk produced by farmers here will have been at least 13% higher. We weren’t insulated any more than anyone else from the international price weakness, but obviously that increase in volume helped offset that to some extent.
“We have seen a big increase in terms of the value and the volume of specialized nutritional powders such as infant formula. They grew very strongly in the year gone by, they were worth about $1.25bn (€1.15bn), which was a growth of 25% in value terms, but a lot of that was due to increased volume.”
Nutritional powders focus of investment
Brennan said that these powders are critical to Irish exports, and they are an area they’ve concentrated on.
“That’s a sector that there has been a lot of investment in in Ireland over recent years, and we’re starting to see a significant increase in output, and that certainly helped insulate the overall value of dairy exports during the year.
“Butter volumes were up by 30%, so that helped drive on the value of butter exports a little bit, which were up by about 15%. Cheese was back by about 7%, and really just reflecting that the UK market takes about 60% of our cheese exports, and that was weaker price wise,” Brennan added.
Asia key to growth
However, Brennan told DR that it’s primarily Asia where the growth lies, with the nutritional powders.
“The specialized nutritional powders are heading for Asia. The volumes going to China and India are up by about 40%, that’s very substantial. China is our second biggest dairy market at this stage, and it’s growing very strongly over recent years, and it’s predominantly those specialized nutritional powders that are destined for China.
“It’s a critical market to us. If you went back five or six years ago, China was probably our eighth or ninth biggest market.”
Strong dollar helps exports to US
Brennan said that they are also seeing potential in other Southeast Asian countries, and the Middle East. There is also growth in exports to the US.
“We saw a big increase in casein exports to the US, and drove on the value of dairy exports to the US by in excess of 35%. That was a positive development,” he said.
“Partly it’s down to currency. The Euro was 16% weaker against the dollar; that had a positive effect on our competitiveness, albeit we were operating in the same weak international price environment as everybody else.”
Looking to other markets
Bord Bia is opening new overseas offices in Singapore and Warsaw to help exporters targeting South East Asia and Eastern Europe.
Chief Executive Aidan Cotter said, “Irish food exporters registered record growth, in a period when global food commodity prices declined by approximately 19%, the Russian market was effectively closed to EU food exports, and consumer sentiment remained sluggish across the Eurozone.
“This year will present further opportunities for growth in most sectors notwithstanding challenges from continued global dairy price pressures through the early months of 2016.”