Butter oiled the wheels of 2018 agri-exports
Butter oiled the wheels of Irish food and drink exports in 2018, with the annual value of Irish butter exports exceeding €1bn for the first time. This was a 22% increase on 2017’s butter trade value, resulting in an exceptional year for the butter trade in the US and continental Europe. This was a welcome diversification from the Brexitprone food and drink trade to the UK.
However, yesterday’s Export Performance and Prospects report by Bord Bia confirmed a 3% increase in the value of these exports to the UK in 2018, reaching €4.5bn, or 37% of all Irish food and drink exports.
The food and drink industry is particularly exposed as part of Ireland’s vulnerability to a no-deal UK exit from the EU next March, which the International Monetary Fund has estimated would drag Ireland’s GDP down by 4%. Sectors such as prepared consumer food, horticulture and live animal exports are extremely dependent on exports to the UK. Nevertheless, 2018 was still a good year for the food and drink trade, with the volume of exports slightly up (by 1%) in Ireland’s ninth consecutive year of export growth in volume terms.
But the value of these exports fell back 4%, to an estimated €12.11bn.
Key drivers of the 2018 performance were the volume growth in the meat trade, b u t c o u n t e r e d by p r i c e pressure; the increase in milk availability and the buoyant butter price; quotas and production limitations challenging seafood exports; multinational transfer pricing activity in the dairy sector; and global food price declines, said Agriculture Minister Michael Creed and Bord Bia CEO Tara Mccarthy when they launched the Export Performance and Prospects report in Dublin yesterday. Although the strongest performer in terms of export growth in 2018 was the dairy sector, with volumes up 5%, it was affected by a change in transfer pricing accounting processes in one of the manufacturing multinationals, which created a decline in the value of exports in specialised nutritional powders, a trade which has increased from less than €600m in 2010 to €1.1bn in 2018.
China is the destination for 50% of the specialised nutritional powders exported from Ireland in 2018.
The dairy and meat/livestock categories continued to dominate food and drink exports in 2018, each with 33% of the export value, with prepared foods at 15%, beverages 12%, seafood 5%, and horticulture and cereals 2%.
A 3% rise in Irish beef production shoved up export volumes, but beef prices tightened 1.8% for exporters.
The breakthrough for Irish beef export access to China last April opened the way for shipment of over 1,000 tonnes of beef in 2018, according to Bord Bia.
There was notable success in 2018 for some industry subsectors.
Poultry exports rose 8% to €316m. The poultry industry is set to produce 100m birds for the first time, in 2019. Irish chocolate manufacturers enjoyed an exceptional year of export growth, at 13%. With the US market for Irish whiskey growing more than 10% in 2018, the value of Irish beverage exports, both alcohol and non-alcoholic, now stands at almost €1.5bn.
Agriculture Minister Michael Creed and Bord Bia CEO Tara Mccarthy at yesterday’s launch of Bord Bia’s Export Performance and Prospects 2018-2019 annual report that charts the value of Irish food, drink and horticultural exports.