Irish dairy exports to UK declined in 2020 says Bord Bia report
Bord Bia said this was in spite of a period of unprecedented change and challenge that saw the largest disruption to normal market operation, with uncertainty around Brexit and pandemic challenges that saw the closure of the UK foodservice market.
Launching Bord Bia’s Export Performance and Prospects 2020/2021 report, Ireland’s Minister for Agriculture, Food and the Marine, Charlie McConalogue, said that the overall volume of Irish exports fell marginally by 2% in 2020, valued at €13bn ($15.8bn).
In 2020, 33% of Ireland’s total food and drink exports headed to the UK, 33% were destined to international markets outside the UK and EU, and 34% went to the EU27.
Although dairy continued its global growth trajectory into 2020, exports to the UK were down 13%, to €831m ($1bn). Significant decline in UK foodservice and Brexit contingency planning were contributing factors.
Dairy is the most geographically diversified category of all the major Irish food and drink exports. The report said 49% of all dairy exports are destined for markets outside the UK or the EU27. Exports to these markets was the key growth driver in 2020. In terms of product categories, strong growth was achieved in specialized nutritional powders and other powders (including SMP, WMP and casein).
Butter performed ahead of expectations despite significant commodity price decline and the impact of a 25% tariff in the US. Butter exports were worth €961.4m ($1.1674bn) in 2020, the most valuable of all the dairy sub-categories, albeit just marginally ahead of cheese exports at €961.3m ($1.1673bn). Cheese exports to Asia, North Africa and to the EU27 accounted for the largest portions of growth, underlining the success exporters have had in diversifying markets for Irish cheese beyond the UK.
SMP prices and demand globally were strong throughout 2020, delivering value growth on the same export volume as 2019, while specialized nutritional powders had a positive year, with growth to traditional and new markets. Exports in this category were worth €956m ($1.16bn).
Donal Denvir, Bord Bia general manager, Great Britain, said, “It is really positive to see that Irish exports to the UK remain strong and resilient during this period of uncertainty. Bord Bia has been working tirelessly to support food and drink suppliers in Ireland through the impact of the pandemic and Brexit. Notwithstanding what the future brings, the UK will remain the largest single destination for Irish food and drink exports as we continue to navigate challenges in 2021 and beyond. Our geographical proximity, shared language and shared cultural understanding ensure that the UK will remain a key strategic partner for Irish food and drink exports.”
Chief executive of Bord Bia, Tara McCarthy, said, “Behind the remarkable export performance of our food and drink sector in 2020 are seismic challenges at a strategic, category and channel level. Last year was a pivotal year of learning for us all and 2021 will be even more significant in terms of how we apply these learnings to rebuild and drive growth in new and emerging markets.
“The success of the industry’s transition to doing business virtually – from participation at online trade fairs to the development of virtual trade missions – shows that we can, and we will, rise to the challenge of doing business in new and inventive ways. This resourceful approach, coupled with the sectors’ focus on customer diversification over the past decade has now paid dividends and is integral to safeguarding our exports.”
On expectations for 2021, McCarthy said the global supply demand dynamic for produce remains positive despite global challenges and continued uncertainty with Brexit and the pandemic.
“As we start 2021, exporters are reporting solid order volumes which is a direct result of the strength of trading relationships nurtured over many years. That said, the extra costs and complexities of trade with our largest destination market, as new customs procedures interrupt the smooth flow of produce, will cause significant challenges and should not be underestimated.
“With a return to global economic growth forecast for 2021, we anticipate continued strong global demand for Irish dairy. All around the world consumers and customers are increasingly demanding credentials around sustainability that Ireland is well-placed to meet as we seek to differentiate ourselves from competitor exporting nations and to navigate gastro-nationalism in key markets. Our action plans, programs and priorities for 2021 and beyond are centered on value creation for the full supply chain – from farm to fork. With Bord Bia’s insight driven support, we remain focused on partnering with this vibrant and resilient sector to pursue global growth in a very different world.”