Mid Year Export Performance
Despite a challenging year for global trade, Irish dairy, sheepmeat, pigmeat and horticulture exports have risen for the first six months of the year. However, the beef and poultry sectors have seen exports fall by 7% and 2% respectively, when compared to the same period last year. Bord Bia outline the performance of beef, dairy and sheepmeat exports so far this year (January to June).
Irish beef exports were down 8% in value and 7% in volume in the first half of this year, reflecting reduced demand in export markets, a reduction in cattle available for slaughter, and increased live exports of finished cattle to Northern Ireland.
The UK Market
The UK remains the most important Irish beef export market taking 47% of total exports. Tesco, Sainsbury and Asda all buy Irish beef but the largest volume is sold in the catering and foodservice sector which was still down by half in July. Considerable bounce back is expected in August with the UK government’s “eat out to help out” support scheme predicted to attract 35 million customers in 85,000 outlets. Although exports are down, the Irish share of UK beef imports has risen to 80% of total beef imports.
Sales to all continental markets were down between 5% and 22%. After the UK, the Netherlands is our most important beef export market, taking 19,381 tonnes, which is down 14% compared to the first half of 2019. France took 17,868 tonnes of Irish beef in the first half of the year and Italy, the next largest customer, took 14,846 tonnes.
Sales beyond the EU continued to grow, increasing again on 2019 levels. Five years after securing access to the US, it has become a meaningful market for Irish beef exports taking 3,874 tonnes in the first half of 2020. This is tiny compared with exports to the UK and relatively small beside other EU sales, but it represents a doubling of sales compared to the first half of 2019.
China was becoming a key market, with mainland China taking 6,105 tonnes, that’s ahead of established markets like Sweden and Spain. Most of these sales took place in the first five months of the year, as exports to mainland China had to be suspended in June due to the discovery of a case of BSE in Ireland.
The Philippines has become a well-established market for lower value cuts of beef and has recorded 33% growth in exports so far this year (12,151 tonnes). Two other markets outside the EU that have shown dramatic growth – through from a small base – are Canada and Japan. Exports to Canada increased fourfold (to 2,133 tonnes) and sales to Japan have reached 2,800 tonnes (virtually nothing was exported to Japan during the same period last year).
Free trade agreements between both of these countries and the EU have assisted the development of this business as previously they had particularly high tariffs barriers on beef. In the case of Japan, these are reducing annually from 38.5% to 9% over 15 years so we can expect further growth in this market.
The Irish dairy industry went from strength to strength in the first half of 2020. Despite the global pandemic, the volume of produce exported increased by almost 5%. Dairy exports for the first six months of the year are €2.56 billion, an almost 8% increase on the previous year.
Even though the UK is the single largest market for Irish dairy, Irish dairy is not as reliant on the UK as the Irish beef market. Exports to the UK are down just under 10% on the same period last year to €396.8m (160,283 tonnes). The loss of the catering and coffee shop sector during the Covid-19 shutdown in the UK hit Irish dairy exports, particularly butter and cheese, where volumes were down 38% and 10%.
In the EU, the Netherlands is the biggest destination taking 139,902 tonnes though much of the dairy produce shipped there is for onward delivery to international markets through Rotterdam port. Germany is a long-established market for Kerrygold butter and took 56,218 tonnes in the first half of the year, followed by France on 29,849 tonnes – a 12% drop in volume compared to 2019.
Outside of Europe, Asia is the most important market for Irish dairy exports at €443m – an 8.5% increase on the first half of 2019, though the volume of sales was slightly down at 102,445 tonnes. China is by far the biggest market in Asia, taking over half of this volume at 52,515 tonnes.
Japan grew significantly at 7,318 tonnes up 36% and as was the case with beef exports, the free trade agreement that will eliminate tariffs on cheese over time contributed to this growth.
Africa was the major growth market in the first half of the year, up over 34% to €332m. It is mainly a market for milk powders (accounting for over half of sales value) followed by cheese and butter. Nigeria is the largest market in Africa (28,121 tonnes) taking twice as much as the next largest buyer, Senegal (13,779 tonnes).
Sales to North America grew 15% in value to €217.7m compared to the same period last year. The US is the main market accounting for 27,102 tonnes. It is mainly a butter and cheese market and the performance is particularly satisfying given the addition of 25% tariffs imposed due to the Boeing dispute between the US and the EU.
It has been a reasonably satisfactory year so far for sheep farmers with a strong export market showing an increase in value of 7% to €168m, despite a small drop in the volume of product shipped.
France is the most important market for Irish sheepmeat but the real growth market this year is Germany. German exports are up 39% to 4,002 tonnes. The UK took over 8000 tonnes accounting for 20% of all Irish sheepmeat exports.
The strong performance so far this year has been driven by a combination of favourable factors. The major Muslin holidays were held earlier in the year, coinciding with peak supply of lamb, while production in the UK, the biggest exporter of sheepmeat in Europe was down. Drought in Australia curtailed the output of the world’s largest exporter and New Zealand focused on supplying Asian markets more than the EU leaving an opportunity for Irish exports.
For further data on Irish exports visit: www.bordbiaperformanceandprospects.com
A longer version of this article, written by Phelim O’Neill, is published in the Irish Farmers’ Journal, issue 29th August.