Food and drink exports were resilient in pandemic year of 2020

Minister pays tribute to  farmers and food and drink producers
Food and drink exports were resilient in pandemic year of 2020

Tara McCarthy, CEO, Bord Bia: “Behind the remarkable export performance of our food and drink sector in 2020 are seismic challenges at a strategic, category and channel level. Picture: Marc O’Sullivan

Bord Bia has welcomed food and drink exports for 2020 valued at €13bn, falling by only €0.2bn from 2019, despite a year of unprecedented challenge and the largest disruption to normal market operation, globally, since the end of World War II.

Increases were recorded in the value of Irish dairy, pigmeat and sheepmeat exports, along with very significant increases in the value of exports to Africa and the Middle East, as new markets come to the fore.

Agriculture Minister Charlie McConalogue said: “Ireland’s food and drink producers faced many challenges on the domestic and international front last year.

“Despite this, they found a new level of resilience that saw them hold global exports at €13bn. The marginal dip of 2% is in stark contrast to the towering pandemic challenges they faced, including the closure of foodservice, increases in shipping costs, and dramatic consumer behaviour changes as people migrated to working from home.

“I pay particular tribute to our farmers, as well as our food and drink producers, for their heroic efforts in supporting a balanced economy, despite dealing with a once-in-a-lifetime global pandemic”.

Bord Bia Chief Executive Tara McCarthy, said: “Behind the remarkable export performance of our food and drink sector in 2020 are seismic challenges at a strategic, category and channel level.”

Exports of food and drink from Ireland have increased consistently, by 16% in value since 2016, and by 67% since 2010.

Dairy continued its growth in 2020, with a 3% uplift in value of exports, to €5.2bn, a record level, exceeding €5bn for a second year.

The second largest category in Irish food and drink exports, the meat and livestock sector, also delivered a resilient performance in 2020, with a 2% increase in total value to €3.4bn.

A challenging year for beef exports was offset by strong growth in the value of pigmeat and sheep exports.

And it was a pleasant surprise for farmers to learn that their favoured live export trade increased in value by 10% in 2020, to be worth €221m — despite a decline in the number of animals exported, by 30,000.

However, it was mostly a decline in the proportion of calves, the lowest value element in the live export mix. Exports of more valuable store, weanling and finished cattle increased strongly during 2020, primarily due to an increase in trade with Northern Ireland.

The drystock farming sector also reaped the benefit of sheepmeat export values increasing 12%, to €356m in 2020. Tighter supplies of sheepmeat globally and an improvement in demand in key EU markets drove this increase.

Primary pigmeat exports were worth €586m in 2020, a 14% increase on 2019, on the back of a 3% increase in the volume of exports. 

Alcohol exports overall were down 19% in 2020 to €1.3bn.

Last year saw a decline in the value of primary Irish seafood exports of 10%, to €443m, due to the disruption of exports in the shellfish category normally destined for the foodservice channel, locked down for much of 2020.

Horticulture and cereals exports increased by 8% to €221m in 2020, with the UK being the core market.

The primary constituents of this export mix are mushrooms, primary cereals and amenity horticulture. The value of mushroom exports rose by 14% to €115m.

Prepared consumer foods exports in 2020 were worth €2.5bn, representing a 4% reduction year-on-year, due to disruption brought on by the pandemic.

The largest part of this category, and the source of the largest decline, is value-added meats supplied almost entirely to the foodservice channel. These exports were worth €648m in 2020, a 14% decline on 2019.

Poultry exports declined by 2% in value in 2020, to €152m, but volume increased by 4%.

Outlook for 2021

According to Bord Bia, the global supply and demand dynamic for Irish food and drink products remains positive in 2021. “The likely end of the pandemic will enable a return to growth. Dairy demand growth will continue to outpace supply. The global meat supply balance will continue to favour producers, particularly in Asia”.

The food board said consumers and customers increasingly expect credentials around sustainability and welfare, that Ireland is well placed to supply, and to differentiate from competitor exporting nations.

But trade disruption and increased barriers to trade could stymie potential growth. “The future trading relationship with the UK is uncertain. This is further complicated by the extent to which the UK acts as a bridge for logistics to the EU-27. “Disruption in this area is likely to be a temporary phenomenon however, not lasting beyond quarter one of 2021.”

Bord Bia Chief Executive Tara McCarthy, said, “As we start 2021, exporters are reporting solid order volumes, which is a direct result of the strength of trading relationships nurtured over many years.

“That said, the extra costs and complexities of trade with our largest destination market, as new customs procedures interrupt the smooth flow of produce, will cause significant challenges and should not be underestimated.

“With a return to global economic growth forecast for 2021, we anticipate continued strong global demand for Irish dairy.

“We expect the global meat supply balance to favour producers, particularly in Asia, which has been at the centre of much Irish export growth.

“All around the world, consumers and customers are increasingly demanding credentials around sustainability that Ireland is well placed to meet.”

Bord Bia expects the UK will remain the largest single destination for Irish food and drink exports in 2021 and beyond.

The food board said exporters are wise to invest resources in diversification beyond this one market, but its geographical proximity, shared language, and shared cultural understanding, in combination with the UK’s need to import food, and the UK consumer’s appreciation of the sustainability credentials of Irish food and drink, ensure that the UK will remain a key strategic partner for Irish food and drink exports.

However, the Trade and Co-operation Agreement between the EU and UK will reduce Irish and other European fishing vessels’ access to UK waters.

Over a five year period to June, 2026, the quota available in those waters will reduce 25%.

This will likely have notable effects for the Irish fleet on pelagic and prawn catches, a significant proportion of which are currently taken from UK waters, according to Bord Bia. 

The food board said ratification in its current form of the EU-Mercosur trade agreement would be difficult, leading to significant increases in the flow of beef from South America to the EU.

On climate change challenges for the Irish food and drink sector, Bord Bia warned the price and availability of input commodities will become more disrupted, and there will be increasing consumer expectation of certified processes to minimise greenhouse gas emissions.

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