Agri-food exports 12% higher last year

AGRI-FOOD EXPORTS increased by 12 per cent last year and gained footholds in new markets, but Minister for Agriculture Simon Coveney has warned that challenging times lie ahead for farmers and food processors.

Publishing the Department of Agriculture and Marine’s annual review and outlook yesterday, Mr Coveney said 2011 was “another very positive year” with exports of produce worth €8.8 billion.

“In fact, exports in 2011 are 25 per cent ahead of the levels recorded in 2009. The dairy and beverages sub-sectors performed particularly well, with exports from the dairy sector up by some 17 per cent.”

He said the net inflow of funds to the Irish economy from the agri-food sector was much higher than in other sectors because the profits remained here.

“The agri-food sector sources 76 per cent of raw materials and services from Irish suppliers, compared to 42 per cent for all manufacturing concerns. In addition, much of the employment in the agri-food sector, both direct and indirect, is dispersed throughout the country, making it particularly important to rural areas.”

However, he said Irish producers and processors were vulnerable to global price trends.

“Ireland is a small open economy, and volatility in world commodity 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.

“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 report said prospects for Irish dairy exports were good for 2012, but prices would probably not be as high as in 2011 when exports increased by 17 per cent.

The value of beef exports was about 15 per cent higher in 2011 despite lower output volumes. “Prices are also expected to decline slightly in 2012, while input costs will increase,” it said.

Farmers’ input costs such as fertiliser, land rental and seed costs were expected to increase this year and it predicted “a challenging year” for cereal farmers.

This was supported by an IFA meeting of grain farmers in Portlaoise yesterday.

IFA grain chairman Noel Delany said only one-third of the harvest had been cut because of the wet weather. “Yields are down 25 per cent and 500,000 tonnes in potential grain production has been lost at this stage, leaving growers down €100 million compared to last year.”

The report said sheep farmers had a positive year last year and that was expected to continue as “an expected decline in EU production should mean that increased supplies from Ireland will find a ready-made market with the prospect of further increases in price”.

Pig farmers’ margins continued to remain below long-term averages in both Ireland and the EU.

“Given that cereals account for up to 75 per cent of pig feed, the doubling of wheat and barley prices in a little over 12 months has had a considerable impact on the pig sector.”

The report said surveys had shown a significant recovery in agricultural land prices last year.

It said there were 1,448 organic farmers in the State last year, with a further 269 organic processors. The total area under organic production was 52,390 hectares at the end of 2011, less than 1.2 per cent of agricultural land.

Forest cover in Ireland reached some 750,000 hectares in 2011, or nearly 11 per cent of the total land area. This compared to a European average of 40 per cent.

The seafood industry generated sales of €728 million last year and provided 11,000 jobs in coastal regions. However, it was a difficult year on the home market with sales down 7.5 per cent.

“During 2011 the shift from salmon and prawns to cheaper cod, coley and haddock continued. Allied to consumers buying cheaper seafood, there was also a trend to purchase smaller portion sizes with continued growth in pre-packed products.”