Record €13bn Irish food and drink exports in 2019

Irish food and drink exports reached €13bn in 2019, a 7% increase on the 2018 value and a 5% increase in volume of exports.

This represents a 67% increase in on export values since the start of the decade in 2010.

When non-edible products such as hides are included, the value of Irish Agricultural exports was €14.3bn.

Dairy sales accounted for €4.4bn of this, an 11% increase on the previous year.

The value of beef exports was €2.25bn in 2019, a 7% decline on 2018, and the value sheepmeat exports also fell 7% to €294m. Live exports showed a 3% decline to a value of just over €167m.

Prepared foods, alcohol, seafood and horticulture all produced increased returns on the previous year

The value of pigmeat exports jumped 13% to €940m, while the poultry sector delivered a 5% growth in export values to just under €306m.

Prepared foods, alcohol, seafood and horticulture all produced increased returns on the previous year and between them accounted for 36% of Ireland’s total food and drink exports.

While the UK remains the most important market for Irish food and drink exports, it has fallen from taking 42% of Irish exports in 2010 to 34% in 2019, with the percentage of sales outside the EU increasing from 24% in 2010 to 31% last year. The share of Irish exports to other EU countries has remained stable, increasing by just 1% over the decade.

Irish poultry exports grew by 10% in volume to 150,000t valued at €306m in 2019.

By far the biggest export market is the UK, taking 91,000t, valued at €218m, though a significant part of this was for onward sale to international markets.

The EU took 27,300t, with France the main market, taking 6,400t, worth around €14m.

The main export market for Irish poultry outside the EU remains South Africa, despite the imposition of a 35% import levy.

Despite increasing demand from China for imports, Ireland isn’t yet approved to supply that market. Irish production increased 5% in 2019, reaching a record 106m birds processed.

Numbers of cattle exported live increased by 20% in 2019 to 300,000 head compared to the previous year but the value was 3% lower at €167m, reflecting a surge in calf exports from just over 161,000 in 2018 to 200,000 in 2019.

Spain and Italy were the main markets, between them accounting for 85% of all calves exported.

Weanling numbers exported in 2019 increased to 38,000 from 33,370 the previous year, while finished cattle numbers increased to 32,000 from 23,867 in 2018 and these were primarily to Northern Ireland. Store cattle exports were in line with the previous year at 28,000.

It was a difficult year for Irish sheep farmers, with an average price of €4.40/kg in 2019, which was 25c/kg lower than 2018 and 5c/kg below the rolling five-year average.

Throughput at Irish factories is expected to finish around 2.8m for the year, a decline of 5% on the previous year. A total of 67,500t of sheepmeat was produced, a 3% decline. The value of Irish sheepmeat exports in 2019 was €294m, a reduction of 7% on the previous year.

France was again Ireland’s main export destination at €87m

Although Brexit didn’t take place in 2019, the deadlines had an impact on EU markets, where the UK is a major supplier. Sales to the UK increased by 4% in 2019 to €57m, with €195m of sales to the rest of the EU, a 16% decline on the previous year.

France was again Ireland’s main export destination at €87m, a 16% decline. Germany was Ireland’s third most important market for sheepmeat at €30m of sales, a decrease of 20% on the previous year. Both Sweden and Belgium accounted for €23m of Irish sheepmeat sales in 2019.

Beyond the EU, the market for Irish sheepmeat exports is small. Canada on €4.2m and Bangladesh on €4.8m are the two most important markets.

African swine fever (ASF) has decimated the Chinese pig herd and driven huge demand for all meat imports

Bord Bia expects a return to growth of sheepmeat exports in 2020, assuming no unforeseen events.

Easter falls on 12 April and Ramadan begins on 23 April; both these occasions are traditional drivers of sheepmeat demand.

Elsewhere, African swine fever (ASF) has decimated the Chinese pig herd and driven huge demand for all meat imports.

In 2019, China replaced the EU as the main global export destination for their sheepmeat exports and the expectation is that New Zealand will fill less than 60% of its available EU quota in 2019.

Australia too has had difficulty with drought, meaning a fall of 7% in lamb throughput to 21.2m in the year to June 2019.

The spate of bush fires is expected to result in further reduction this year.

Pigmeat export values reached a record €940m in 2019, reflecting an exceptionally strong second half in which pig prices hit €2/kg for the first time.

A small increase in carcase weights meant the 3.4m pigs processed produced 304,000t, a modest improvement on 2018. Strong EU pigmeat prices meant Irish pigmeat imports for secondary processing and packing were down.

The UK remains the biggest export market, taking 96,000t

This meant more domestic production was kept in the home market, with 254,000t available for export, a decline of 4%.

The UK remains the biggest export market, taking 96,000t, an 11% decline on the previous year.

However, the increased value of pigmeat meant the value of exports increased by 8% to €501m despite the decline in volume exported.

Sales to Japan increased 19% to €44m in 2019

Exports to China surged in 2019 to their highest ever level at 82,000t, with value doubling from €73m in 2018 to 151m in 2019.

Sales to Japan increased 19% to €44m in 2019, while sales to Australia showed significant growth from €18m in 2018 to €25.5m in 2019.

With China losing 40% of its pig herd due to ASF, it is widely predicted that the deficit will drive international demand for all meats in 2020.

Last year was a particularly tough one for beef farmers and this was reflected in the fall in the value of exports to €2.25bn, a 7% decline.

The volume of Irish beef produced was 624,000t, a 1.5% reduction on 2018.

A 1.5% increase in carcase weights partially offset the 3% decline in numbers of cattle processed from the 20-year high of 1.8m in 2018. Net exports of Irish beef (excluding offal) in 2019 were 560,000t worth €2.1bn, a fall of 10% on 2018 values.

The value of Irish beef exports to the UK was down 15% to €990m

The value and volume of sales to the UK fell in 2019. Volumes were down 11% to 265,000t and, while the UK is by far Ireland’s biggest beef export market, the share of Irish beef exports there was down to 47% from 52% the previous year.

The value of Irish beef exports to the UK was down 15% to €990m. This is broadly similar to sales to the rest of the EU combined, which amounted to 250,000t at a value of €995m.

Exports to international markets beyond the EU increased to 45,000t, accounting for 8% of total exports and more than doubling 2018 exports outside the EU.

While Philippines was the largest volume market at 18,000t, it was for lower-value meat products, making the value €34m.

A volume of 12,000t was exported to China in 2019, worth €31m. Sales to the US also doubled in 2019 to 5,000t at a value of €19m.

Beef prospects

Farmgate prices in both Ireland and the UK were back 7% in 2019 compared with the previous year, while R3 young bull process were back 5% on average in the EU 15 countries.

The volume of beef consumed in the EU was down 0.9% in 2019 and a further decline is expected in 2020.

With most Irish factories now approved by China for frozen boneless beef, we will be in a position to further increase sales in that market

However, markets outside the EU were buoyant, particularly in the latter part of the year. This meant a decline in EU imports and a parallel increase in EU beef exports of 8% in 2019. As with pigmeat, China is leading the international demand for beef imports, bringing in an estimated 1.5m tonnes in 2019.

This is predicted to exceed 2m tonnes in 2020. With most Irish factories now approved by China for frozen boneless beef, we will be in a position to further increase sales in that market in 2020.

South American countries are also expected to grow their share of the market but there will be some pressure on Australian supplies because of drought and the recent devastating bush fires.

There is short-term stability in the UK as it is to move into the transition phase following the expected departure from the EU on 31 January but longer-term uncertainty remains as a future trading relationship has to be in place by the end of this year.

Ireland’s dairy sector was the engine that drove export growth in the wider food and drinks industry last year. Irish dairy exports recorded double-digit growth of 11% to reach €4.4bn in value – an all-time record.

Butter exports grew by 13% to reach €1.2bn, and 2019 was the second consecutive year that butter exports exceeded the billion euro mark. At the same time, Ireland’s cheese industry saw exports grow a massive 22% last year to reach just under €1bn in value.

The only black spot on the dairy dashboard was a 10% decline in the value of infant formula exports from Ireland

On the powders side, the remarkable turnaround in the commodity value of skimmed milk powder (SMP) throughout 2019 saw Irish SMP exports soar 55% year on year to €331m. Exports of specialised whey powders grew by 31% last year to €131m.

The only black spot on the dairy dashboard was a 10% decline in the value of infant formula exports from Ireland last year to €929m.

In volume terms, Irish infant formula exports remain strong, with extra production capacity added on the island last year

However, this was mainly driven by new accountancy practices by the multinational infant formula giants that operate here.

In volume terms, Irish infant formula exports remain strong, with extra production capacity added on the island last year.

Aside from the drop in infant formula exports, it would seem Ireland’s dairy industry enjoyed a bumper year for exports in 2019, right? Not quite.

If we look beyond the topline figures, there was a lot of forward stockpiling of butter, cheese and SMP that could have implications for dairy trade patterns in 2020.

If we take butter, for example, 2019 saw exports of Irish butter soar 22% in volume terms to an all-time high of 263,000t.

Bord Bia estimates that US buyers may have bought enough extra Irish butter to get them through the first six months of 2020

However, the biggest driver of this export volume growth was buyers in the US scrambling to import as much Irish butter as they could lay their hands on before new import tariffs of 25% slapped on EU dairy goods by President Donald Trump came into effect at the end of October.

Bord Bia estimates that US buyers may have bought enough extra Irish butter to get them through the first six months of 2020 before they will have to start importing butter with heavy tariffs on it.

Similarly, the two no-deal Brexit deadlines in March and October 2019 led to a significant amount of stockpiling of Irish cheese in the UK market last year.

And on the SMP side of things, market prices recovered significantly in 2019 but Bord Bia is wary of recent SMP stockpiling in China that may distort dairy market trade patterns in the first half of 2020.

That being said, 2019 was still a strong year of growth for Irish dairy and the outlook for 2020 is quite promising on dairy markets.

Irish milk production grew by 6% last year, close to a record 8bn litres, and co-ops were able to find a home for this increased output.

Encouragingly, almost all of the growth in dairy exports is being driven from increased exports of products such as butter, cheese and dairy powders, which are made and sold by the dairy co-ops.

This means the benefits of the export growth are being passed back to farmers in the form of stronger milk prices, which would not really be the case if infant formula produced by multinational companies was the driver of export growth.

Exports of Irish prepared consumer foods returned to growth in 2019 after a challenging 2018. Exports of value-added meats grew by 4% to €640m, while exports of non-alcoholic drinks grew 10% in the year to reach €209m.

The prepared foods category also includes exports of fat-filled milk powders which recorded strong growth of 11% last year to reach €741m.

The top markets for Irish fat-filled milk powder exports are the Netherlands, Nigeria, Germany and Poland, where it is used as a food ingredient or a finished consumer product.

Other areas of the prepared consumer foods sector that saw growth include chocolate exports (+2% to €256m), bakery (€200m), cereal-based products (+48% to €55m) and biscuits (€25m).