While farming everywhere has always been an industry where there have been good years and bad years, the island of Ireland is almost uniquely well positioned for the production of food, as a temperate climate, coupled with generations of experience and genuinely world-leading expertise mean the island as a whole punches well above its weight globally in food exports.
However, the challenges, both strategic and structural, the industry faces right now are multifaceted. While we will cover both those challenges, and the opportunities that exist, over the coming pages, it is worth a moment to take a concise look at the challenges food production on this green isle faces.
Market volatility While farmers and food producers have for years dealt with prices rising and falling in international markets, the volatility seen over the past couple of years has been unprecedented. The dairy market soared in 2022, followed by a rapid reversal in 2023. Fertiliser and energy prices spiked. Export markets have seen rapid change. New trade deals add to uncertainty about the outlook.
Environmental rules This price volatility is happening against a backdrop of increased environmental legislation and scrutiny for everyone in the industry. Whether it is legislation, such as Corporate Sustainability Reporting Directive (CSRD), the nitrates derogation, or increased demands from end customers, the focus on environmental practices seems only set to increase over the coming years.
Climate risks The increased focus on the environment does not exist in a vacuum. While global concerns about climate change are pushing the changing rules, it is food production which is at the vanguard of industries directly affected by the phenomenon. Increasing annual rainfall and more unpredictable weather cycles fundamentally change the production outlook at farm level.
Policy uncertainty Stemming from that increased focus on environmental practices is the increased policy uncertainty faced by the food industry. Decisions related to trade agreements, Brexit, and changes in subsidies and regulations all also can impact profitability for farmers and processors.
Labour shortages The growing lack of available labour in the industry is increasingly becoming a major issue. While the end of free movement of labour has been a particular challenge for the dairy sector in Northern Ireland, difficulty finding, and crucially retaining farm workers is a factor across the island. Added to this are recent national wage increases which increase pay demands at all levels of an industry where margins are generally already very tight.
Access to land
High land costs have always been a significant barrier to new entrants to the market. In recent years, however, those high land prices have become a barrier to producers looking to maintain their production levels as they are increasingly pressured on stocking rates and to set aside more land for environmental uses. This competition for land is having a profound effect on some farming activities, such as tillage.
Age profile of farmers The average age of primary food producers across the island continues to grind higher as the potential next generation of farmers are less interested in getting started in an industry where the hours are long, the work is isolating, and earnings are inconsistent.
Mental health and wellbeing Those long hours, often working in isolation, coupled with the pressures from everything else in the list above are increasingly having an impact on the mental health of farmers.
Farmers are considered a group at-risk of developing mental health issues.
Adding to this problem, according to recent research from Teagasc, are cultural norms such as that of self-reliance among farmers. This can cause delays in seeking help, which coupled with a lack of resources in rural communities means farmers are considered a group at-risk of developing mental health issues.
Opportunities
The “challenges” side of the food production balance sheet is certainly full. But it is very important not to lose sight of the opportunities which exist for food production on the island.
Product diversity While food production might be seen as being dominated by one industry, export data from Bord Bia shows that this is certainly not the case.
Even in 2022, when global dairy markets soared, that sector only accounted for just over 40% of exports. Beef, sheepmeat, pigmeat and poultry made up more than 25%, drink, seafood and horticulture a combined 15%, with the prepared consumer foods sector – the only one to show value growth in 2023 – accounting for 20%.
Market diversity When looking at markets it is important to remember that we will always trade the most with the countries closest to us.
The mainland UK market is of critical importance to food exports from the Republic of Ireland – accounting for 38% of food and drink exports last year – and also is obviously the market of choice for food and drink produced in Northern Ireland.
However, exports have over recent years increasingly looked further afield for markets and this work is paying off. As one market, for example, China, goes into slowdown others such as the US or Germany pick up the slack. This diversification of markets is key for long-term sustainability for food production on an island where we produce many multiples of local-market requirements.
Quality produce
The reputation the island has for producing the best quality products in the world is both well deserved and hard earned. This reputation for quality, safety and traceability means that in many markets Irish products command a premium price – something producers can capitalise on by focusing on premium markets around the world.
Sustainabilty There is a payoff for food producers from the environmental legislation they face and it is the further enhancement of the island’s reputation for supplying food produced under the highest standards on environmental, sustainability and animal welfare practices.
Adding value The days of butter being exported from the island in 50-pound boxes are long behind us as processors in the country continue to do more to add value to the products they export. Even if farm output on the island is close to peak, that does not mean that the island is close to the peak in the value of food exports. Among processors there is a constant drive to figure out how to “add value” to their products, whether this is through new innovations or moving further along the value chain towards direct-to-consumer products, the drive to do more is constant.
Collaboration Finally, the value of collaboration cannot be understated. While there is obviously competition within the industry, there is also a huge level of collaboration. Whether it is between farmers sharing knowledge or processors working closely with multinational customers on developing new products, the industry as a whole has always benefited from knowing that a rising tide lifts all boats.