Warning on prices as exports increase to €8.8bn
AGRICULTURE exports grew to nearly €9bn last year, but weaker commodity prices could cause huge problems for the sector, according to a new report.
The Department of Agriculture's annual review and outlook for 2011/2012 says exports tied to the agriculture sector rose 12pc year-on-year to €8.8bn in 2011.
That puts them more than a quarter ahead of the total value of the sector's exports in 2009.
Exports from the dairy sector were up 17pc, driven mainly by growth in new markets in the east. Non-Europe dairy exports topped €930m during the year, the report claimed.
Agriculture minister Simon Coveney welcomed the figures, but warned that the country was at the mercy of volatility in commodity prices.
"Ireland is a small open economy and volatile prices can have serious adverse consequences in terms of lower prices for our produce or higher prices for our inputs.
"Recent trends show that 2012 could be very challenging for many sub-sectors as world prices decline and some of our trading partners enter recession,'' he said.
"The future of the sector is also heavily dependent on the outcome of negotiations both within Europe and between the EU and other global economies."
The department report warns that while the prospects for dairy exports are good this year, prices will "probably not be as high as 2011.
"[Milk] prices are expected to fall by about 7pc in 2012 and input prices will remain high. Increased production in other key markets, including New Zealand, will lead to a more competitive market, but higher demand should mean that Irish exports will still have a good year," the report states.
"Following a large increase in live cattle exports in 2010 the numbers were lower across all types in 2011. Overall, cattle exports fell 35pc and the number of calves exported fell by 45pc".
The value of beef exports climbed 15pc, however.
Reiterating plans to boost the value of agri exports to €12bn by the end of this decade, Mr Coveney stressed that producers would need to increase the primary value of their goods by about a third over the next eight years.
About 140,000 people are employed in agriculture in the Republic, making up nearly 8pc of the workforce.