Record food and drink exports announced

Speaking at the launch of Bord Bia’s Export Performance and Prospects 2016-2017 report, the Minister said: "2016 marked the 7th successive year of growth of Irish food and drink exports, with a further 2% increase recorded to reach a record high of €11.15 bn, an expansion of 41% or €3.3 bn since 2010. The strongest performing sectors last year were prepared foods (€1.92 bon, +9%), beverages (€1.4 bn, +4%) and dairy product and ingredients (€3.38 bon, +2%).”

One of the notable features of this achievement is the impact of market diversification in the year in which the UK decided to leave the European Union. While trade with the UK fell by 8%, triggered by challenging exchange rates, uncertainty arising from Brexit and further competitive pressures, this was offset by increased exports to international and emerging markets such as North America (+€200 mill. to reach €1.1 bn), China (+35% to reach €845 mill.) and the rest of Asia (+6% to reach €330 mill.). An overall increase of 13% in shipments to international markets, to reach a value of approximately €3.5 bn, was particularly remarkable.

Meanwhile a welcome recovery was also seen in continental EU markets (+3% to reach €3.53 bn) as improving economic conditions led to stronger demand in key categories. The Euro strengthened by 13% against sterling in 2016 while there was little change in exchange rates with the US dollar. According to Bord Bia estimates, the underlying weakness and volatility of sterling negatively affected the competitiveness of Irish exports reducing the value of trade by a potential €570 mill.

The strongest performers in terms of export growth in 2016 were prepared foods, sheepmeat, beverages, pigmeat and to a lesser extent dairy. Weaker prices negatively affected the value of beef and edible horticulture exports while lower volumes affected seafood exports. Livestock exports declined in value terms largely due to a significant reduction in live cattle shipments, while poultry exports recorded a significant decrease due to both reduced prices and lower volumes.

Export markets look set to remain challenging in 2017 amid ongoing market uncertainty. However, the pickup in global dairy demand is expected to continue while further opportunities for growth are likely in beverages. Increased beef export availability may put some pressure on returns while prepared consumer foods exports are likely to face on-going competitive pressures, most notably the UK.

Higher volumes for all categories were offset by a difficult market environment for some meats in 2016, leaving the value of meat and livestock exports 2% lower at around €3.66 bn. This equates to 33% of total food and drink exports. The value of Irish beef exports showed a slight fall, standing at €2.38 bn. The volume of beef available for export increased by 5% to around 535,000 t, while average prices eased by 6%. The volume of pigmeat exports lifted by 2% while average pig prices were almost 2% higher. This left the value of Irish pigmeat exports up by 4% in 2016 at €615 mill. An increase of 3% in sheepmeat volumes available to export coupled with steady lamb prices saw the total value of Irish sheepmeat exports increasing by over 4% in 2016 to reach €240 mill. For the year it is estimated that the value of Irish poultry exports fell by 14% to €275 mill., due to lower volumes coupled with weaker export prices. The value of Irish livestock exports was down 23% at an estimated €150 mill. as lower exports of cattle and pigs and more competitive prices in key export markets affected trade. The prospects for the meat and livestock sector in 2017 are mixed with a strong rise in finished cattle supplies expected, while prospects for sheep and pigmeat remain broadly positive amid anticipated steady supplies.