6 areas of attention for dairy industry following ‘stellar’ 2020 performance

Irish dairy and specialised nutrition exports delivered a “stellar performance” for the Irish economy in 2020, when considering the challenges posed during the year, according to Dairy Industry Ireland (DII).

The Ibec association representing the Irish dairy and specialised nutrition sector was commenting following the publication of Bord Bia’s Export Performance and Prospects report this morning (Wednesday, January 13).

Today’s report showed a 3% uplift in dairy exports to €5.2 billion – despite the challenges to the industry from the Covid-19 pandemic and the disruption of Brexit.

The industry-led strategy of aggressively diversifying Irish dairy markets in preparation for Brexit is also paying dividends – with almost half of exports now going outside both the UK and the EU – DII noted.

Commenting, DII director Conor Mulvihill said: “Irish dairy and specialised nutrition processing in the spring faced the vista of the first peak of Covid almost exactly overlapping with the all-time record peak of milk production on the island.

“To arrive at the situation that we find today that every drop of milk was processed, employees kept safe, suppliers fully paid and increased revenue to the economy is nothing short of a remarkable achievement.

Even in the face of these challenges the industry has also worked hard on driving improvements in its environmental agenda, added value product development as well as looking at diversification of end use markets.

“This is testament of the herculean effort of all stakeholders along the dairy supply chain,” Mulvihill said.

To continue the success of the industry DII underlined that there are a number of areas that need continued attention.

This include the following six areas:
  • Export credit insurance;
  • Environment and sustainability;
  • Brexit;
  • Capex [capital expenditure] investment;
  • Research and development; and
  • Diversification agenda.

First up, on Export Credit Insurance, DII outlined that, despite all competitors having this in place to help through the challenges of covid and Brexit, Ireland remains a complete outlier without a state backed scheme.

This is now a “fundamental competitiveness issue” where Irish government policy is putting the industry at a clear disadvantage, the Ibec group contended.

Turning to environment and sustainability, DII highlighted that the industry recognises this as the key area of improvement over the coming decade.

“We have much work done and we want a whole of government and whole of sector approach implemented, using forums like Dairy Sustainability Ireland, to ensure that the industry continues its environmental success in tandem with economic delivery for our country,” the association stressed.

On Brexit, the representative group said that while Ireland has been successful in its diversification strategy, Britain remains a key market for the Irish dairy industry.

We very much are looking that the all-Ireland dairy economy is protected, and government and political supports are put in place to mitigate the increased costs associated with getting product to the British market.

Highlighting that dairy specialised nutrition is now Ireland’s largest native industry, DII pointed to the need for Capex investment, stating that, to continue success, Irish industry need to work with government in delivering “world leading processing infrastructure to maintain our competitive advantage”.

Research and development, the group said, needs to be accelerated to underpin Irish value add offerings in terms of developing functional foods.

This would also help with technological on-factory and on-farm solutions to help underpin Ireland’s sustainability credentials, it was added.

Finally, on a diversification agenda, DII called for continued support for industry and Bord Bia to develop international routes to market.