Pat Deering
Ceist:33. Deputy Pat Deering asked the Minister for Agriculture, Food and the Marine the way in which dairy exports performed in 2017; and if he will make a statement on the matter. [7012/18]
Amharc ar fhreagraTuesday, 13 February 2018
Ceisteanna (33)
Freagraí ó Béal (6 píosaí cainte)
How did dairy exports perform in 2017 in view of the fact that dairy production has increased by over 9% in the past year? In December alone there was a 13.7% increase in dairy production. I recently read an article produced by a man mentioned earlier, Commissioner Hogan, in which he made the point that alarm bells should be ringing with respect to dairy expansion. There is a perfect storm building involving Brexit, oversupply and Food Harvest 2025, with certain targets for increasing dairy production.
Analysis from Bord Bia and my Department, both based on Central Statistics Office, CSO, data, demonstrates the resilience of the Irish food and drink export sector and the dairy export sector in particular. Whereas full-year CSO data becomes available towards the middle of this month, estimates made by Bord Bia for their annual performance and prospects publication provides a positive assessment of Ireland’s performance in 2017, as well as our prospects for 2018 in both the food and drink sector and the dairy sector in particular.
The year 2017 was the eighth consecutive year of export growth for the food and drink sector as a whole, with the dairy sector, which comprises more than a third of the total, having the strongest performers in terms of export growth for the year. Bord Bia analysis indicated that for the year as a whole the value of food and drink exports is estimated to have increased by 13%, or €1.5 billion, to €12.6 billion, representing growth of almost 60% or, €4.7 billion, since 2010. When one adds exports of other primary products, such as hides and skins, animal foodstuffs and forestry products, the final aggregate total for the entire agrifood sector can be expected to be in the region of €13.5 billion in 2017.
Furthermore, driven by increased production and higher dairy market returns, the analysis indicates that Irish dairy exports increased by 19% in 2017 to €4.02 billion, an increase of €655 million.
It should be noted that this figure as used by Bord Bia excludes dairy-based prepared consumer foods, as well as enriched dairy-based powders which, if included, increase the export figure for dairy related products by a further €900 million approximately.
On the prospects for 2018, as a small, open economy, Ireland’s relationship with trading partners around the world is a key driver of our success in this global food business. Based on this, we can say the prospects for dairy exports in 2018 look positive. The rates of growth recorded in 2017 for key product areas and the ongoing demand levels in Europe and international markets for powder-based products, butter and cheese bode well, as does the fact that wholesale prices remain very high, reflecting international demand. Ireland exports more than 85% of its milk and dairy produce to markets all around the world. In the context of the Food Wise strategy and as a key part of the Brexit response, Bord Bia, my Department and I will continue efforts to widen our access to third country markets, as well as deepen existing trading relationships, including through inward and outward trade missions.
There is no doubt that the export of food products has been the good news story for the past few years. One could argue that without the agriculture sector the economy would be in a far worse place than it is. In view of the fact, for example, that dairy exports to the United Kingdom dropped by approximately 10% in 2016, are we finding alternative markets? The United Kingdom is our nearest market and a key player. What efforts have been made to find alternative markets? The Minister referenced some markets, but what efforts have been made and where exactly are we headed?
One of the most welcome aspects of the Bord Bia publication in January was that, while the value of our exports to the United Kingdom had increased in financial terms, the volume of exports to the United Kingdom had dropped from almost 40% in 2016 to 35% in 2017. This is a vindication of our strategy to try to find new markets, both within the rest of the European Union and in third countries outside it. Interesting figures include the rate of growth in exports to Asia in 2017 of 6% to €850 million. The level of trade with Africa recovered by almost 20% to a value of over €200 million. Exports to the Middle East were stable, at approximately €290 million, while the value of the North American market grew by 7% to approximately €270 million. It was driven particularly by growth in exports to Mexico and the United States. At more than €650 million, China accounts for approximately 37% of our international dairy trade and 16% of our total dairy exports.
I thank the Minister for those figures. It is encouraging to see that we are moving further afield. Some of our products are particularly perishable and may not reach these destinations in time. Should we be diversifying some of our products at this stage? For example, at 85%, the British market is our main market for cheddar cheese. How will we replace that market? It is a key concern in the context of Brexit, in particular. If events do not go in a very satisfactory way, that market could be totally wiped out.
The exposure of the dairy industry to cheddar cheese exports to the United Kingdom is a particular concern in the context of Brexit. As the Deputy mentioned, it will be difficult to find a home for all of the 80,000 tonnes on international markets. I took part in a recent trade mission to Korea and Japan where those involved in the dairy industry saw some prospect of increasing the volume of cheddar exports. If, in the context of a hard Brexit, it was no longer financially viable to export to Britain, we would be faced with a significant challenge. Therefore, in the recent budget we committed to the provision of funding for Teagasc for the development of a food innovation hub at Moorepark. The rationale is that the food industry could leverage the expertise of Teagasc and research at UCC to research new product formulations for dairy products and also to see how it might test and bring to a conclusion research with a view to the substitution of cheddar. That is part of the strategy.