The value of Irish dairy exports stood at €6.3 billion in 2023, down almost 8% when compared to the previous year, according to new data.
The Bord Bia Export Performance and Prospects Report 2023—2024, published today (Wednesday, January 10), shows that the overall value of Irish food exports for last year was almost €16.3 billion.
This is a drop on the 2022 figure of around €16.7 billion, which was a “record breaking” increase of 22% on the 2021 figure.
Dairy exports
David Kennedy, Bord Bia head of dairy, said that following “a fantastically positive performance in 2022”, global dairy markets took a downturn leading to a “poor” export performance across all destinations.
He said that strong farmgate milk prices in the second half of 2022 lead to increased supply.
This resulted in high stocks of expensive dairy products around the world at the start of 2023 which struggled to work their way through the supply chain.
Kennedy added that the cost of living crisis meant that affordability was a real challenge for consumers last year.
Irish dairy products were sent to 140 markets around the world last year with butter, cheese and whey accounting for 40% of the volume of exports.
By September 2023, Eurostat said that EU butter prices had fallen below €4,500/t, a significant drop compared to the period between June and October of 2022 when prices over €7,000/t were available.
In 2023, Irish butter exports dropped in value by 12% or around €175 million to €1.3 billion.
German retail butter volumes were down by 5%, while per capita butter consumption in the UK fell to levels last seen in 2019.
There was a more positive performance in cheese where exports increased by around €55 million in 2023 to approximately €1.3 billion, a rise of 4% on 2022.
Bord Bia said that skim milk powder (SMP) export volumes exceeded 2022 levels with significant stocks released in the first half of the year. However, the report noted that value declined by more than €30 million to an estimated €585 million.
Exports of specialised nutritional powders increased by around €45 million (+6%) in 2023 to stand at €800 million. Whole milk powder (WMP) exports grew by 4% in 2023 to reach a value of €220 million.
Fat filled milk powder (FFMP) exports were back by 9% on 2022 to an estimated €825 million.
Casein contributed most to the overall dairy category decline in 2023 with exports valued at an estimated €500 million, a €185 million drop on 2022 levels. This was mainly due to a reduction in unit prices.
Markets
The widespread price decline in 2023 impacted on priority markets with dairy exports to the EU back by 9% to €2.2 billion.
Dairy exports to the UK fell by 15% to €1.1 billion, while exports to North America dropped 8% to €750 million.
There was a 3% decline in dairy exports to Asia to an estimated value of €880 million, exports to China were down 5% despite demand for specialised nutritional powders, casein and the milk and cream category.
Exports to Southeast Asia were mixed with growth in Indonesia and Thailand, countered by declines in Singapore, Vietnam, and Malaysia.
However, the value of dairy exports to the Middle East grew by 24% to reach €390 million, mainly due to retail sales in Saudi Arabia and additional trade with the United Arab Emirates (UAE) and Iraq.
Milk supply
2023 milk collections in Ireland were down by almost 2% on 2022 levels to around 8.7 billion litres due to difficult weather conditions.
This marks the first year Irish milk supply has dropped since the abolition of EU milk quotas in 2015.
Globally, milk supply increased by 1% in 2023, with Europe, New Zealand and the US all showing an upswing in output.
China also grew its milk pool by 2% which is at a slower rate than the 8% growth recorded in 2021 and 2022.
Outlook
Bord Bia said that 2024 will be “a pivotal year” for the Irish dairy sector due to its requirements under the Climate Action Plan and the Nitrates Action Programme (NAP).
In relation to the outlook for trade, the report said that it is likely there will be a modest increase in output from the main exporting regions, while import growth of 2% is expected.
China will need to import around 17 million tonnes of dairy products, despite a forecasted 2% growth in domestic production this year.
Demand for imported butter is predicted to increase by up to 5% in the UK, while per capita consumption of butter and cheese in the US is also expected to grow.
Bord Bia said the high prices of 2023 have worked through the supply chain and lower on-shelf prices should attract consumers back to the dairy category during the course of 2024.