Surge in beef exports to the UK

In the week that Ministers McConalogue and Hayden are leading a trade mission to Asia, the most striking feature of Irish agri-food exports in the first half of 2022 is the increased dependence on the UK for both beef and dairy exports.

Pigmeat and dairy are well established in Asian markets though volumes for both were down in the first half of the year. Access for beef remains an issue, with China and South Korea still not open and Japan taking a tiny volume of just 1,510t between January and June 2022.

Farmers will be hoping that the ministers’ visit will give this trade a boost.

The most striking feature of dairy exports in the first half of 2022 compared with the same period in 2021 is the 74% increase in volume to 350,980t sold to the UK.

The value of sales increased by 49% to €592.1m. This includes a huge increase in volume and value to Northern Ireland which, in many cases, is for further processing including in the drinks sector, part of crossborder trade that is facilitated by the controversial post-Brexit protocol.

David Kennedy, head of dairy at Bord Bia, highlighted to the Irish Farmers Journal that exports to the UK were particularly low in the first half of 2021 because of stockpiling ahead of Brexit coming into effect on 1 January and the figures for the first half of 2022 reflect the trading pattern of previous years.

Volumes to the EU also increased significantly, rising by 22% to 267,100t with a value increase of 53% to €1.1bn reflecting particularly strong dairy markets in the first half of 2022. The US returned a more modest growth in volumes of 12% but value increased by 43% to €269.4m, reflecting both a strong butter and infant food market and a progressively strengthening dollar, which has appreciated by 20% against the euro since the start of the year.

Volumes to African and Asian markets were both down though value increased again reflecting rising market values plus a stronger dollar value, the currency both regions trade in internationally. Volumes to Africa were down 5% to 127,159t but the value was up 26% to 416.3m, while volumes to Asia fell by 9% to 92,706t but the value increased by 14% to €432.2m.

After a period when Irish beef exports were slowly diversifying into Asia and North America, the first half of 2022 shows a major return to the UK as the priority market and, to a lesser extent, the EU 27.

The volume exported to the UK increased by a huge 39% on the first half of 2021 to 132,437t, exactly half of all Irish beef exports for the first half of the year.

The value increased by 36% to €548.6m though the value per tonne was actually lower than in the same period last year at €4,142/t compared with €4,228/t in 2021. A greater carcase beef export trade to the north and inter company trading could explain this.

While there is also a Brexit element with beef with the first six months of 2021 being particularly low, the volume for the first half of 2022 is higher than any of the past five years.

Exports to the EU also increased, up 13% in volume to 110,858t at a value of €619.2m, a 30% increase.

The UK and EU took 92% of Irish beef exports in the first half of the year.

Exports to the US fell by 56% compared with the first half of 2021 to 1,743 tonnes with value also down by 34% to €48.7m. Volumes to Asian markets have fallen to 8,121t compared with 11,986t in the first half of 2021 and this is the lowest level since the first half of 2018.

Irish sheepmeat sales to the UK rebounded in 2022 from the low of 2021 but at 7,618t and a 20% increase on last year, it is still the second lowest volume for the past five years.

The EU is the main export market with year-on-year growth in volume and value.

Volumes for the first half of 2022 were 25,740t, the highest in the past five years.

Within the EU, the main market is France taking 10,817t followed by the developing German market which reached 5,544t in the first half of 2022.

Sales outside the EU and UK are tiny. The US has been approved but no significant sheepmeat was exported in the first half of the year.

Canada remains a small but growing market, taking 357t in the first six months of 2022.

The big story of pigmeat exports is the 25% drop in volume and 26.5% drop in value of exports to Asia from the record high in January to June 2021. Exports to China are down from 57,603t to 32,867t though there was a significant increase in sales to South Korea, up from 1,643t to 5,951t in the first six months of this year.

Notwithstanding the impact of Brexit on 2021 figures, the growth of beef exports to Britain at a time when markets in the EU were stronger is the standout feature in the first half of 2022.

Dairy and pigmeat markets fluctuate, reflecting global trading patterns.

France, followed by the UK and other EU markets, remain the most important outlets for our sheepmeat.

With China remaining closed, developing international markets remains a struggle for the beef sector, which is about to be subject to more competition in the UK as UK trade deals come into effect.