Weaker euro powers Irish exports to €10.8bn

The value of Irish food and drink exports increased by 3% to €10.8bn last year, a record. The estimate is from Bord Bia’s export performance report.

Beef was one of the stronger performers, it says. Export volumes of dairy products and pigmeat also rose, but their prices fell.

There were two key drivers of this export growth: higher output from Irish farms and euro weakness.

The impact of higher production was €450m. Milk deliveries rose 13%, pigmeat export volumes were 8% higher.

Weakening of the euro against sterling and the US dollar had a major effect, boosting exports by an estimated €950m.

This big effect arose because 41% of our exports are going to the UK and 28% to markets that predominantly trade in US dollars.

The euro weakened by 10% relative to sterling in 2015, by 16% against the US dollar.

Global prices

Global agricultural commodity prices fell by 19% in 2015. Looking at December prices compared to a year earlier, meat prices were 23% lower, dairy 14%, cereals 18% and oils 12%. Nonetheless, the overall index remains 25% higher than the 2000-2010 average.

Beef – a good year

Supplies of fit cattle to the slaughter plant for export fell by 5% to 1.56m head. This was partially countered by a 2% increase in average carcase weight. Net production of beef was 560,000t, including local abattoir output. With domestic consumption unchanged, the volume of beef available for export was just over 500,000t, 4% down on 2014.

But the lower volumes were offset by an 11% rise in prices. The value of Irish beef exports rose by 6% to €2.19bn plus another €220m for offal exports or €2.41bn in all.

Irish male cattle prices averaged 103% of the EU average compared with 99% in 2014. The average male cattle prices across the EU in 2015 showed a marginal rise and stood at €3.91/kg. Male cattle prices in the UK showed an 11% rise, reaching €4.82/kg, with the Irish equivalent price standing at 83% of this figure.

Markets

Volumes of Irish beef sold to the UK were largely unchanged at 272,000t, worth almost €1.1bn. This equates to just over 54% of total exports. Also:

Live exports

Total live cattle exports fell by 25% in 2015 to around 178,000 head. Calf exports fell to 86,000 head. Exports of weanlings and stores were 43,000 head, down 43%. Irish exports to Italy and Spain declined by almost 20,000 head or 26%. Prices of weanlings in France were quite competitive, restricting Ireland’s potential to increase market share.

Exports to non-EU markets were 77% lower, due to reduced shipments to Libya on the back of a difficult political situation.

Dairy difficulties

Higher global milk production met lower demand in China and a Russian ban, resulting in downward price pressure. Global milk production is estimated to have increased by 2% in the January to September 2015 period. Irish milk supplies grew about 13% last year.

China saw a significant slowdown in dairy imports following stock building in 2014. Nonetheless, Chinese imports of specialised nutritional powders were 38% higher up to the end of November, with Ireland now the second largest supplier.

Overall, the value of Irish dairy and ingredient exports increased by around 4% to €3.24bn. Higher exports of specialised dairy nutritional powders helped offset significant declines in other categories.

The UK remains a key market for Irish dairy exports, accounting for almost one-third of the total. However, exports there fell 4% in 2015 to an estimated €960m. Declines in cheese, SMP and WMP exports were offset somewhat by some increase in butter and specialised nutritional dairy powders.

Exports to other EU markets rose 8% to reach around €920m, 28% of total trade. Specialised nutritional dairy powders and butter led the way. Exports to international markets grew by 9% to €1.36bn.

Butter performs

The strongest performing categories were specialised dairy powders and butter. Despite higher volumes, the value of cheese exports declined by 7% to €700m. Specialised nutritional dairy powders showed further growth in exports, reflecting a jump of around 25% in volumes coupled with a rise in demand, particularly from Asian markets.

The category now accounts for 35% of total dairy exports, with trade estimated at €1.15bn in 2015. Volumes exported to China jumped by almost 40%.

Sheep steady

Total sheep disposals were broadly stable at 2.59m head. Average carcase weight rose by almost 2%. This led to sheepmeat production rising by 1% to 58,000t.

Domestic consumption was relatively steady at around 15,500t. Volumes available for export rose by 2% to 47,000t. The value of exports increased by over 5% to €230m.

The UK and France continue to be the core markets for Irish sheepmeat, accounting for 63% of total export volumes. Exports to France declined by around 12% to just over 16,000t valued at €83m. Shipments to the UK were helped by favourable exchange rate and showed a sharp rise to reach almost 13,000t.

Sheepmeat output in the EU was 753,000t. EU consumption rose by 2% to 1.06m tonnes or 1.8kg/capita.

Pigmeat problems

The Russian trade embargo, 3% rise in EU output and 8% rise in Irish output all combined to make 2015 difficult for pigmeat. Irish prices were down 10% to €1.43/kg, EU prices fell 11%.

Here, the higher output arose from a 3% increase in the breeding herd in 2014, increased productivity per sow, a 3% rise in carcase weights and a 4% decline in live exports. This left production for the year at 275,000t. Pigmeat consumption was down 1% at 149,000t. Imports are estimated to have fallen by 6% to the equivalent of 99,000t.

The volume of pigmeat available for export rose by 8% to almost 230,000t. However, lower prices left the value of Irish pigmeat exports down 2% at €570m.

Exports to the UK were helped by currency changes and rose by 6% to 90,000t, valued at almost €350m. Exports to other EU markets rose to 60,000t but value fell by 6% to €90m.

Exports to international markets grew by 3% to around 80,000t. This trade was valued at €130m. China remains the second most important market for Irish pigmeat, with exports reaching over 40,000t.

Poultry progress

Irish poultry meat exports increased by 3% to 109,000t for the full year 2015. The value of Irish exports increased by 3% to reach €320m. Imports remained relatively stable at 124,000t.

The value of exports to the UK increased by 4% driven by stronger shipments of processed poultry, poultry offals and frozen poultry. A high proportion of these exports are being redirected to International markets once they reach the UK, for products such as chicken feet and gizzards and other offal type products.

Exports to other EU markets slowed. Shipments to international markets increased twofold in 2015 to €20m with most product destined for Africa with some further openings in Vietnam.

Retail sales of fresh and chilled poultry in Ireland increased by 5% to 44,000t product weight during the 52-week period ending 6 December. In the same period, the number of broilers processed increased by 6% to 76.9m head.

Other

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