It was clear from presentations given at this week’s Bord Bia Meat Marketing Seminar that the prospects for Irish food exports are going to be heavily influenced by developments in two key countries: the United Kingdom and the United States.

The drivers will be different in both jurisdictions. For the UK, as the largest single market for Irish food and drink exports, it will be the performance of the economy and consumer sentiment which will directly drive both the value and volume of exports.

For the US, while there are significant dairy and drink exports, the biggest effect will be from the policies of the incoming administration of Donald Trump.

Looking at the UK first, there are clear risks from the weak economy there at the moment. Data released on Friday 17 January showed that retail sales in the country fell in the final three months of the year, increasing concerns that the UK economy may be on the point of contraction.

This data has caused a weakening in the value of the British pound, which, if sustained, will in turn make Irish exports more expensive.

Biggest risk

However, the biggest risk from a weakening UK economy and falling consumer spending is the potential for the reduction in the number of customers there for the higher-value food products which Irish processors supply.

To be clear, there is little risk that there will be a fall in volumes supplied to the UK, but if the overall value of trade falls due to consumers being unwilling or unable to purchase high-value products, then that will inevitably lead to reduced farm-gate prices here.

Finding alternative destinations which provide the same value and ease of access ... will be very difficult

Because the UK is such a significant market, particularly for meat products where it accounts for almost half of all Irish beef exports, finding alternative destinations which provide the same value and ease of access, as well as being able to handle the volumes, will be very difficult.

This means that the current weakness in the UK economy is particularly a risk to Irish beef prices.

On the brighter side, the UK at least now has a more stable political landscape than has prevailed in recent years and Irish food products remain very well regarded among the country’s consumers, so if the economic slowdown there is brief, then the lasting effect on Irish exports could be limited.

Trump concerns

When it comes to the United States, almost all the risks lie in the political landscape. With the inauguration of the Donald Trump as president, there are well-founded concerns that there will be a fresh round of trade tariffs, as well as other measures which could disadvantage Irish exporters.

The direct effects from the introduction of tariffs comes in the first place from the scale of the measures. If there is a blanket 20% on all imports, then exports of Irish dairy and drink to the US will be hit.

However, if Trump uses a more targeted approach or introduces tariffs at a lower level, then the direct effects could be close to zero.

In the last four months, the euro currency has weakened by almost 10% against the dollar, which does give Irish exporters some room to compete on price, presuming that weakness in the euro continues.

In the medium term, it is more likely that the disruption caused by the second-round effects of the incoming administration’s other trade policies which could hold the biggest risks.

Trade flows

If there are major changes to trade flows, then Ireland could find itself facing more competition in markets outside the US, as countries which have traditional relied on that market seek new outlets.

However, these disruptions could also lead to new opportunities for Irish exporters. If Trump engages in a trade war with China, it may well work to Ireland’s advantage.

China is putting pressure on EU food imports through trade investigations which were launched in 2024. If the country finds itself in a major trade dispute with the US, it is less likely to seek an expansion of measures against EU suppliers, as the country will not want to be at loggerheads with both its main trading partners at the same time.

Overall, Irish food exporters and Irish farmers need a strong UK economy and a US administration which fails to follow through on the worst of its protectionist tendencies. If that is what transpires over the coming years, then the future for producers and processors here is bright.