Success of diversification ‘evident’ in Bord Bia 2020 export performance report

Figures from the annual Bord Bia Export Performance and Prospects Report 2020/2021 indicate that exports of Irish food, drink and horticulture produce were held to a unexpectedly small decrease of 2% in 2020, valued at a total of some €13 billion.

According to Bord Bia, this figure indicates that the ‘diversification dividend’ from opening and expanding access to new markets “is evident”. Ireland now exports agri-food and horticultural food produce to 180 countries.

The food marketing authority said that increases have been 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 international markets “come to the fore”.

In 2020, Ireland’s agri-food export markets can be grouped in thirds: one-third of exports went to the UK; (just over) one-third went to the EU27 (not including the UK); and one-third went to international markets outside the EU (third countries).

Since 2016 and as of 2020, the value of Irish food and drink exports to Asia has increased 14% to €1.4 billion. Exports to Africa over the same period have increased by 86% to €883 million in value, while the EU27 grew by 25% to €4.4 billion.

In the same period, value of exports to the UK grew by only 10%.

Dairy

The dairy sector continued an upwards trajectory, delivering a 3% uplift in the value of exports to €5.2 billion; the second year that dairy exports exceeded the €5 billion mark.

Dairy is the most geographically diversified category of all the major Irish food and drink exports. 49% of all dairy exports were destined for markets outside the UK or the EU27. Exports to these markets was the key growth driver in 2020.

Butter performed ahead of expectations, and was worth €961 million in exports in 2020, the most valuable of all the dairy sub-categories, albeit just marginally ahead of cheese exports (butter exports were worth €961.4 million while cheese exports were worth €961.3 million).

For cheese, exports to Asia, north Africa and the EU27 accounted for the largest portions of growth, underlining, Bord Bia said, the success exporters have had in diversifying markets for Irish cheese beyond the UK cheddar market.

Skimmed milk powder prices and demand were strong globally throughout 2020, delivering value growth on the same export volume as 2019, while specialised nutritional powders also had a positive year.

Meat and Livestock

The Bord Bia figures indicate that the meat and livestock sector delivered a “resilient” performance in 2020, with a 2% increase in total value to €3.4 billion.

Bord Bia noted that it was a “significantly challenging year for beef exports”, but that this was offset by strong growth in the value of pigmeat and sheepmeat exports, while the live export sector also experienced a return to growth in 2020.

The value of primary beef exports saw a 2% decline to €1.9 billion in 2020. Bord Bia attributed this to pandemic-related disruption in the main destination markets for beef, along with the closure of access to China for much of the year.

In the UK – which represented 44% of primary Irish beef export value – extensive retail channel demand somewhat offset the significant decline in foodservice demand.

Sheepmeat export value increased 12% to €356 million in 2020, due to tighter supplies of sheepmeat globally and less sheepmeat moving from the UK to the EU27.

Primary pigmeat exports increased by 14% to €586 million in 2020. 41% of all Irish primary pigmeat exports are now destined for Asia, with China accounting for the majority. Increases in the value of pigmeat exports to Japan and Vietnam occurred also.

Poultry exports declined by 2% in value in 2020 to €152 million, having been notably affected by the pandemic.

Other sectors

The key points for other agri-food sectors are summarised as follows:

  • Horticulture and cereals exports increased by 8% to €221 million in 2020, with the UK being the core market. The value of mushroom exports rose by 14% to €115 million;
  • 2020 saw a decline in the value of primary Irish seafood exports of 10% to €443 million. This was due to the disruption of exports in the shellfish category normally destined for the foodservice channel;
  • Prepared consumer foods (PCF) exports in 2020 were worth €2.5 billion, representing a 4% reduction year-on-year due to channel disruption brought on by the pandemic;
  • Covid-19 has had a significant impact on alcohol exports. Alcohol exports overall were down 19% in 2020 to €1.3 billion.

Prospects

In terms of future prospects, Bord Bia chief executive Tara McCarthy said: “For Irish food and drink producers, the global supply demand dynamic for their produce remains positive in 2021 despite global challenges and continued uncertainty as we navigate Brexit and our fragile exit from the pandemic.

“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,” she added.

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,” McCarthy noted.

“All around the world consumers and customers are increasingly demanding credentials around sustainability that Ireland is well-placed to meet as we seek to differentiate ourselves from competitor exporting nations,” she added.