In addition to this, the UK officially left the European Customs Union in January 2021, fundamentally changing the way the Irish dairy market trades and operates with its closest partner. In the face of this, it would be a fair assumption to make that the outlook for Irish dairy doesn’t look too rosy, but actually, this couldn’t be further from the truth.
This is according to Padraig Brennan, meat, food and beverages director at Bord Bia, the Irish food board.
Brennan said the relationship between the UK and Ireland’s food and drink industries is deep-rooted and symbiotic.
Geographical proximity; strong cultural and social affinities; a shared language; complementary approaches to agriculture and food processing; commonalities in business, law and relationship building; the list goes on.
“All these factors strengthen the bonds that bind our two nations together in a relationship that runs deeper than on a purely transactional level,” Brennan said.
“This can be seen by UK consumers’ affinity and trust with Irish products. When surveyed, an independent panel of UK cheddar and butter consumers, listed the Republic of Ireland (ROI) as the most trusted origin of products outside of the UK.”
Despite the challenges of the past year, the UK remained the top destination for Irish food and drink exports, accounting for 33% of the sector’s exports in 2020, worth €4.3bn ($5.1m); while Ireland remained the number one export market for UK food and drink, with an export value of €3.4bn ($4.1m) in 2020.
The headwinds buffeting the market, coupled with commodity price reductions for key exports, such as butter, impacted Ireland’s dairy exports to the UK during 2020, with the overall value falling by 13% to €831m ($992m).
In spite of this, Brennan said, Ireland’s overall global dairy exports continued their upwards trajectory in 2020, delivering a 3% increase in value to €5.2bn ($6.2bn).
This figure was driven by the performance of butter, which saw export volumes increase 12%, as well as the strong pricing environment in the cheese market, ensuring exports retained their value, despite a 10% decline in volume.
“As we look ahead to the beginning of a new trading relationship between the UK and ROI, there will undoubtedly be new challenges ahead and shifts in the competitive landscape to overcome,” Brennan said.
“But, one thing that will remain constant is our commitment to supplying the highest quality, sustainably produced and naturally tasty dairy products. The grass-fed diet of dairy cattle has a fundamental impact on the taste profile of the milk and subsequent products that are made from it. Ireland’s rich and fertile grazing pastures, coupled with generations of experience and cutting-edge technology and insight, places it in the ideal position to produce an incredibly high-quality and consistent product.”
Since 2016, Bord Bia has made being prepared for Brexit a strategic priority in support of Irish food and drink exports.
Brennan said research conducted in 2020 for the Readiness Radar report revealed evidence of not just the preparedness of Irish businesses, but also of growing ambition. Against an uncertain backdrop, 91% of respondents indicated progress in their Brexit planning during the previous year, while 55% expressed their interest to grow sales in the UK post-Brexit.
This confidence is reflected by rising consumer confidence for Irish food and drink in the UK. Bord Bia has been measuring UK consumer sentiment since January 2019 through its Brexit Pulse research, with the latest survey (UK Consumer Tracker, Bord Bia’s Thinking House, January 2021) revealing a spike in general consumer confidence in the last quarter of 2020.
The research also indicated the affinity UK shoppers have with dairy products from Ireland, with 70% of UK Cheddar buyers admitting to missing Irish cheese if there was an increase in price or availability; while 65% of butter consumers also said they would miss Irish butter in the same circumstances.
“One of the key drivers behind UK shoppers’ trust in food and drink from ROI stems from our sustainability credentials as a nation,” Brennan said.
“Against a wider backdrop of consumer concerns around animal welfare, quality and sustainability, Ireland has forged itself a world-leading position in these areas with its rigorous sustainability program, Origin Green.”
Launched in 2012, the program supports Irish farmers and producers on driving sustainable practices through a structured and measured approach. Origin Green brings together innovation and tradition to carve out a more sustainable future for the Irish food and drink industry, Brennan said.
To drive quality and generate data from a farm level, there is a voluntary Sustainable Dairy Assurance Scheme (SDAS), which operates under the Origin Green framework.
Thanks to the structure of the SDAS, Bord Bia launched its Grass-Fed Standard.
The accreditation gives verified proof milk used in products and ingredients has come from grass-fed cows, and is designed to help differentiate Irish products on shelf, meeting a wider consumer demand for greater provenance and transparency.
To comply with the standard, Irish dairy herds need a diet that is a minimum of 90% grass. When milk is pooled from various different farms for processing, this figure rises to a grass-fed average of 95%. The system is designed to ensure Bord Bia can accurately quantify the amount of time Irish dairy cows have spent on pasture, which currently equates to 240 full days a year.
The Bord Bia Grass-Fed Standard model was developed by Teagasc, the Irish Agriculture and Food Development Authority – at its Animal and Grassland Research and Innovation Centre – and will use data collected during government-approved SDAS on-farm audits to determine the grass-fed status of each participating herd.
“Adopting a strategic approach, driven by insight, allows us to continuously support our dairy industry in innovating, adapting and staying on top of the latest trends through the creation of world-leading initiatives, such as the Bord-Bia Grass-Fed Standard. While this puts us in a strong long-term position, we remain realistic about the challenges that lay ahead in the immediate future,” Brennan said.
From April 1, the UK government will introduce Sanitary and Phytosanitary (SPS) controls for food and drink products imported into Great Britain. Movement of these goods will require health certification, and this will be another added cost to businesses.
“To support our businesses, Bord Bia is running a series of support programs, training and preparing Irish food, drink and horticultural producers in SPS and Customs requirements,” Brennan said.
The program will provide practical training to companies on the import and export requirements under the new EU-UK trading relationship. This includes customs documentation needed, guidance on TRACES NT and examples of what is needed for food and drink products subject to SPS controls.
“As we look ahead to 2021, our exporters are reporting solid order volumes, which is a direct result of the strong trading relationships nurtured over many years. All around the world consumers and customers are increasingly demanding credentials around sustainability in dairy production that Ireland is well placed to meet. With Bord Bia’s insight driven support, we remain focused on partnering with this vibrant and resilient sector to pursue global growth in a very different world,” Brennan concluded.
Source: dairyreporter.com
