Irish beef exports declined by 2pc to €1.9bn in 2020 caused by pandemic-related disruption in core destination markets – plus, continued challenges in access to mainland China, it has emerged.
However, in the UK – which represented 44pc of primary Irish beef exports last year – extensive retail demand is said to have “somewhat counteracted” the significant decline in foodservice.
These are some of the results outlined in Bord Bia’s Irish Food and Drink Export Performance and Prospects Report 2020/2021. Overall, it details that total exports dropped by just 2pc to €13bn last year despite enduring what it described as the “largest disruption to normal market operation since the end of World War II” in 1945.
Citing its “decade-long diversification strategy”, the Irish Food Board said increases were recorded in the value of Irish dairy, pigmeat and sheepmeat exports, alongside significant increases in the value of exports to Africa and the Middle East as new international markets come to the fore.
On the report, Minister for Agriculture, Food and the Marine, Charlie McConalogue said “the marginal dip of 2pc was in stark contrast to the towering pandemic challenges” faced by producers over the last 12 months.
"Despite the closure of foodservice, increases in shipping costs, and dramatic consumer behaviour changes as people migrated to working from home, producers found a new level of resilience that saw them hold global exports at €13bn.
“As we look to 2021, my Department, along with Bord Bia, are resolutely focused on supporting our primary producers and manufacturers as they trade through continued uncertainty to support jobs and deliver much needed economic progress.”
Bord Bia CEO Tara McCarthy described 2020 as “a pivotal year of learning” adding that this year will be “even more significant” in terms of driving growth in new and emerging markets.
“The success of the industry’s transition to doing business virtually – from participation at online trade fairs to the development pioneering virtual trade missions – show that we can, and we will, rise to the challenge of doing business in new and inventive ways.
“This resourceful approach, coupled with the sectors’ focus on geographic and customer diversification over the past decade has now paid dividends and is integral to safeguarding our exports,” she said.
Since the UK voted to leave the EU in 2016, Bord Bia says Ireland’s global exports grew by over €1.9bn - a 16pc increase in value. Exporters are said to be targeting “high-growth, high-potential priority markets”, largely identified in Asia, the Middle East, Africa and North America.
The majority of growth since 2016 (€1.9bn) comes from the EU27 (46pc or €871m) and international markets (43pc or €817m); while the UK accounted for just 10pc of growth (€195m) since 2016, the report states.
It the same period the value of exports to Asia has increased 14pc to €1.4bn; the value of exports to Africa has increased 86pc to €883m, while continental Europe grew by 25pc to €4.4bn.
In 2020, 33pc of Ireland’s total food and drink exports were destined for international markets outside the UK and EU, while 34pc were destined to the EU27 and 33pc to the UK, the report outlines.
Ms McCarthy continued: “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.
“Exporters are reporting solid order volumes which is a direct result of the strength of trading relationships nurtured over many years. 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.
“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 and to navigate gastro-nationalism in key markets.”
The report outlined that the meat and livestock sector delivered a 2pc increase in total value to €3.4bn. While 2020 was a significantly challenging year for beef exports, the report says the impact was “offset” by strong growth in pigmeat and sheep exports, while the live export sector also experienced a return to growth in 2020, it says.
As mentioned above, the value of primary beef exports was held to a 2pc decline to €1.9bn in 2020. This decline was due to the well-documented Covid-19 disruption in core destination markets for beef, alongside the continued suspension of access to the China market.
In the UK – which represented 44pc of primary Irish beef exports – extensive retail channel demand somewhat counteracted the significant decline in foodservice.
It is outlined that beef consumption in the EU declined by 2pc in 2020 due to the closure of the foodservice channel for the majority of the year and changing consumer habits.
Having gained market access in 2018, Irish beef exports to China were disrupted from May 2020 due to an import suspension. However, it is noted that in the first five months of 2020, Ireland’s beef exports to China were €23 million, representing a 134pc increase on same period 2019.
"The trajectory had been very positive prior to the import suspension in May 2020,” the report says.
Sheepmeat values increased 12pc to €356m in 2020. it is said that tighter supplies of sheepmeat globally, and an improvement in demand in key EU markets, drove this increase. A decline in UK sheepmeat exports to EU27 markets also created an opportunity for Irish produce during 2020.
Primary pigmeat exports increased by a significant 14pc to €586m in 2020. 41pc of all Irish primary pigmeat exports are now destined for Asia, with China accounting for the majority. Increases in the value of pigmeat export to Japan and Vietnam occurred also, as demand for Irish pigmeat outstripped supply.
Following a year of growth in 2019, poultry exports declined by 2pc in value in 2020 to €152m but volume increased by 4pc. Covid-19 is said to have brought “significant headwinds” for poultry export prices and the sector was impacted by a 14pc decline in exports to the UK which was offset somewhat by a 16pc increase in international markets to €43m.
According to the report, Irish dairy continued its growth trajectory into 2020 delivering a 3pc uplift in the value of exports to €5.2bn – achieved despite commodity price reductions for key elements of the export mix, including butter.
Almost 50pc of all dairy exports are destined for markets outside the UK or the EU27. In terms of product categories, very strong growth was reported in specialised nutritional powders and other key powders (including SMP, WMP and casein).
Despite significant commodity price decline and the impact of a 25pc tariff in the US, butter exports were worth €961m in 2020; while cheese exports increased slightly (+1pc) to €961m. Cheese exports to Asia, North Africa and to the EU27 accounted for the largest portions of growth. SMP prices and demand globally delivered value growth on the same export volume as 2019; while specialised nutritional powders exports were worth €956m.
Horticulture and cereals exports increased by 8pc to €221m in 2020, with the UK being the core market. The primary constituents of this export mix are mushrooms, primary cereals and amenity horticulture. The value of mushroom exports rose by 14pc to €115m.
Meanwhile, prepared consumer foods exports in 2020 were worth €2.5bn, representing a 4pc reduction year-on-year due to channel disruption brought on by the pandemic. This category includes meal solutions, confectionary, non-alcoholic beverages, ingredients and value-added meat, seafood, and horticulture.
The largest part of this category, and the source of the largest decline, is value-added meats. These products are supplied almost entirely to the foodservice channel. These exports were worth €648m in 2020, a 14pc decline on 2019. 68pc of all prepared consumer food exports are destined for the UK market, making this sector one of the most Brexit exposed.
Covid-19 has had a significant impact on alcohol exports. Alcohol exports overall were down 19pc in 2020 to €1.3bn.
Notwithstanding that decline, the report concludes that the value of alcohol exports remains 12pc higher than they were pre-Brexit in 2016, which is says underscores the scale of the growth trajectory in this category in recent years. The majority of the decline can be accounted for by declines in the value of exports of whiskey (-€205m), cream liqueurs (-€53m) and beer (-€51m).
Last year saw a decline in the value of primary Irish seafood exports of 10pc to €443m. This was due to the disruption of exports in the shellfish category normally destined for the foodservice channel in key EU27 markets and in Asia. However, there was a significant increase in seafood exports to Africa in 2020 representing a success story for the pelagic category.
The Trade and Cooperation Agreement struck between the EU and UK at the end of 2020 will reduce Irish and other European fishing vessels access to UK waters. Over a five year period to June 2026 the quota available in those waters will reduce 25pc. This will likely have notable effects for the Irish fleet on pelagic and prawn catches, a significant proportion of which are currently sourced in UK waters.