Article appeared in issue 6, 2022
Irish food and drink exports reach record high of €16.7bn
Growth in value and volume boosted exports of Irish food, drink and horticulture by 22 per cent to a record-breaking €16.7 billion in 2022, according to Bord Bia (Irish food board) which recently published its Export Performance and Prospects 2022-2023 report. Irishfood editor, Bernie Commins, reports on the composition of those exports and where, in the world, they went.
The above figures represent a significant increase in food and drink exports in 2022 – up €3 billion since 2021 and moving towards 30 per cent on pre-pandemic levels – back in 2019, the value was €13 billion.
The jump can also be attributed to both increasing unit prices – due to inflation and rising input and operational costs – and an increase in the volume of goods exported, according to Bord Bia.
Generally, the volume of exports for sectors such as Irish beef and dairy increased in 2022, while prepared consumer foods (PCF) and drinks achieved new milestones in the value of their respective exports. Value-added meat and seafood exports, captured under PCF, reached over €1 billion in 2022. This represented an increase of 30 per cent compared with the previous year, with exports surpassing pre Covid-19 levels by 23 per cent. Within meat, this subcategory represents a vitally important outlet for traditionally lower-value cuts, Bord Bia said.
The Export Performance and Prospects report was launched by Minister for Agriculture, Food and the Marine, Charlie McConalogue. He stated that his department estimates that the actual total Irish agri-food exports, including non-edible products that are not included within Bord Bia’s report, to be worth €18.7 billion in 2022!
This is the first Export Performance and Prospects report delivered by CEO of Bord Bia, Jim O’Toole, who stepped into the role in November 2022. “Following two years of profound disruption, 2022 brought a new range of cost and sourcing challenges, making this export performance even more impressive,” he said.
“For large and small businesses across the country the impacts of inflation, input costs and the invasion of Ukraine have been inescapable and make last year's export performance all the more impressive and important. To frame this significant exports figure another way Ireland exported the equivalent of over €45 million worth of food and drink everyday last year to customers in more than 180 countries around the world.”
Looking ahead, he said that the industry needs to be responsive to a range of oncoming challenges in 2023, as the challenging trading conditions of this year will endure and evolve.
“As 2023 is predicted to be another disruptive year of economic difficulty and challenging supply chains, Bord Bia will continue to be agile and responsive to client and sector needs in what is likely to be a period of ongoing volatility. For Irish food and drink exporters, it will be increasingly important to be aware of how consumers respond to the current cost of living crisis and to position their products accordingly.”
A closer look
Irish dairy exports were valued at €6.8 billion in 2022, a year-on-year value increase of 33 per cent or €1.7 billion, driven mainly by Irish butter, up 26 per cent in value, and cheese, up 25 per cent in value.
The increase for butter represents €270 million to a record value of approximately
€1.32 billion. The EU, UK and North America remain the key markets for butter, accounting for 95 per cent of exports.
Cheese exports increased by an estimated €260 million in 2022 to a record value of approximately €1.3 billion. EU markets accounted for over half of this growth with strong trade to France, Netherlands and Germany, fulfilling demand based on lower local supply. Spain and Belgium also performed very strongly from an Irish cheddar exports perspective; rising by approximately 40 per cent and 70 per cent, respectively. Trade to North America and the UK was largely in line with 2021 volumes but with a higher value being achieved. In terms of Asia, Japan remains a key market for Irish cheddar with further value growth evident.
Exports of fat filled milk powder (FFMP) increased by an estimated €230 million in 2022 to a value of approximately €920 million, 34 per cent up on a relatively slow performance in 2021. Strong energy prices, coupled with a strong dollar versus euro exchange rate offered favourable trading conditions into the key west Africa markets of Nigeria, Senegal, and Ghana.
Exports of specialised nutritional powders increased by an estimated €70 million in 2022 to a value of approximately €730 million, 11 per cent up on 2021’s figures and arresting a five-year trend of declining export value. Production challenges in the US served to drive import demand there and across the globe.
Nutritional powders decline in China
Exports of finished product to China continue to decline, albeit at a slower pace than seen in recent years. This is driven by lower birth rates and increased government support for local manufacturers, who are now estimated to account for approximately 60 per cent market share. In contrast, other destinations across Asia including Indonesia, the Philippines and Thailand performed strongly and contributed to overall exports to the region increasing by approximately 5 per cent.
Skimmed milk powder (SMP) export values reached an estimated at €560 million for the year. This is the first time that SMP exports have broken the €500 million mark and represents value growth of €170 million or 44 per cent in 2022.
Exports of casein powders increased by €320 million in 2022 to a value of approximately €790 million, 68 per cent up on 2021’s figures and affirming the strategic decisions the Irish dairy industry has made in investing in the manufacture of this product.
Dairy remains the largest element within Irish food and drink exports with over 1.7 million tonnes of product shipped to over 130 markets worldwide.
Meat and livestock
Meat and livestock exports were valued at over €4 billion in 2022 representing a 15 per cent value increase, up €520 million, compared to 2021. Although product prices increased across all meat species, this robust performance also reflects increases in output levels and average prices within the beef and sheepmeat sectors, according to the report.
Irish beef exports were the largest contributor to the meat sector, valued at €2.5 billion, an increase of €384 million or 18 per cent on 2021 levels.
During the first half of the year, the Irish beef sector benefited from continued strong demand from the UK and EU markets. Exports of Irish beef to the UK increased 15 per cent to reach an estimated €1.1 billion. The UK market accounted for 43 per cent of Irish exports in value terms, down slightly from 44 per cent in 2021. Irish beef exports to Continental European markets grew by 26 per cent to €1.3 billion in 2022, accounting for 50 per cent of the overall value of this trade.
Beef supplies across many markets tightened, most notably in France, Sweden and Spain by between 3 per cent and 4 per cent. Demand was particularly strong for forequarter and manufacturing beef while higher value cuts such as steaks were in lesser demand as food inflation concerns focused attention on value offers. Beef consumption reportedly declined in Germany, France, Sweden and Spain, while Italy saw a marginal increase.
Irish beef exports to international markets are estimated to have declined by 10 per cent to €162 million. This equates to a 6.5 per cent share of Irish beef exports in value terms. This reflected the strength of prices available in the EU, particularly during the first half of the year. Demand from Japan and the Philippines started the year strongly resulting in other countries’ exports increasing slightly to these markets. Meanwhile exports to the US were impacted by the filling of the import quota early in the year and as a result Irish exports declined considerably with this partly offset by higher trade to Canada in 2022.
The European Commission estimates that beef consumption across the EU decreased by 1 per cent while beef imports to the EU rose by an estimated 17 per cent (European Commission, 2022).
The value of sheepmeat exports increased by 17 per cent to €475 million while the volume of exports increased by 10 per cent to 75,000 tonnes. This is the third consecutive year in which Irish sheepmeat exports recorded volume and value growth.
Relatively tight global supplies of sheepmeat combined with stable consumer demand contributed to strong prices for Irish sheepmeat producers in the first half of 2022, despite an increase in domestic sheepmeat production.
During the second half of the year, higher costs of production and more difficult grass growing conditions had a negative impact on lamb performance and ultimately the availability of lambs for processing.
Irish sheepmeat faced increased competition due to a recovery in the availability of UK sheepmeat, as well as an increase in product from the southern hemisphere.
Despite the ongoing pressures faced by the sector, Irish pigmeat export values were 2 per cent higher in 2022 at €540 million as higher prices helped to offset some reduction in export volumes as the year progressed. However, pig producers were faced with unprecedented production costs, which severely impacted on viability for much of the year.
Overall, Irish poultry export values are estimated to have increased by 14 per cent in value terms to €143 million during 2022, with volumes up 3% at 78,000 tonnes.
Prepared consumer foods
In 2022, prepared consumer food (PCF) export values exceeded €3 billion, in a performance that was largely driven by the reopening of foodservice as Covid-19 restrictions lifted in early 2022 across key markets. Inflation played a significant role in this value increase, which was up 17 per cent compared to 2021 levels, as volatility in input costs and rising energy prices curtailed new growth opportunities in the UK and European markets.
Meanwhile, Irish drink exports reached almost €2 billion (+22 per cent year on year) for the first time, a 25 per cent value increase on pre-pandemic (2019) levels, which reflects the extraordinary recovery and now growth of the sector following difficult years in 2020 and 2021. North America continues to be the key export market, representing
52 per cent of overall exports at just under €1 billion. Irish whiskey exports accounted for 60 per cent of the overall value growth last year, with exports valued at almost at
€1 billion (up 25 per cent on 2021) for the first time.
Improved prices helped drive the performance in Irish seafood with export values increasing by 3 per cent (or €17 million) year-on-year to reach €530 million. This was despite a 19 per cent decrease in volumes exported, reflecting the challenging situation faced by Irish seafood exporters in securing supply.
Finally, exports of Irish horticulture and cereals exceeded €300 million, with mushrooms, largely destined for the UK, accounting for 50 per cent or €152 million (down 6 per cent on 2021), while cereals exports were valued at €73 million (up 10 per cent on 2021).
Maintaining a diverse range of markets and channels around the world has been key to the success and continued growth of Ireland’s food and drink exports. In 2022, more than one-third (34 per cent) of Ireland’s total food and drink exports in value terms were destined for international markets, while the EU and UK accounted for 34 per cent and 32 per cent respectively. The UK remains the largest single country market for Irish food and drink exports, with exports valued at an estimated €5.4 billion in 2022, an increase of 20 per cent on 2021 levels. Irish exporters have navigated their way through considerable uncertainty in terms of the new trading environment with the UK, and more recently a rapidly slowing British economy. In value terms, Irish food and drink exports to the EU increased by 29 per cent to reach €5.7 billion last year, and for international markets, the value increased by 23 per cent to reach €5.6 billion. Exports to the US increased by almost 40 per cent to more than €2 billion and while China’s Covid restrictions contributed to a decline in exports to China, growth in the value of exports to the Philippines, India, Malaysia and Japan more than offset this decline. Overall Ireland’s food and drink exports to Asia increased by 9 per cent to €1.5 billion.