- Irish dairy exports saw a modest decline in 2023, falling by around 8% to €6.3bn in value terms due to global trade decline.
- The decline was attributed to an oversupply situation and bearish global commodity markets.
- The cost of living crisis and the challenge of affordability for global consumers led to a significant drop in the supply chain of dairy commodity products.
- Butter, cheese, and whey, which made up 45% of the total dairy export volume, suffered price declines in 2023.
- Irish butter exports to the EU and North America declined 9% and 8% respectively, while exports to the US increased more than 10% in the first 9 months of 2023.
- Exports to Southeast Asia and the Middle East performed favorably, with the value of Irish dairy exports growing 24% to €390m.
- Demand from China is expected to return in 2024, with some solidity in infant formula export figures despite a downturn in import demand.
- The future of Irish dairy exports is expected to be lessened in 2024 due to lower global stocks and more affordable stocks.
- The demand for environmentally-sound dairy products is expected to remain a sustainable trend.
- Overall food, drink, and horticulture exports in Ireland were down 4% on 2022.
- Bord Bia remains optimistic about the future, with almost 70% of exporters believing some level of expansion can be achieved in European and Americas markets.
Irish dairy exports fell slightly in 2023, but in value terms, they increased to €6.8 billion (+33%) due to high farmgate milk prices and strong milk production. However, global trade declined throughout 2023, resulting in an 8% drop in value to €6.3 billion. A 6% increase in the value of cheese, specialized nutritional powders, and yogurt partially offset the overall decline, but the 2023 result was still 22% higher than the 2021 export performance.
David Kennedy, Bord Bia’s head of dairy, attributed this year’s drop in dairy exports to an oversupply situation that emerged in 2023 and bearish global commodity markets. High farmgate prices for milk around the world resulted in increased supply, which struggled to make its way through the supply chain because affordability was a major issue for global consumers. This was evident in Europe, where butter and cheese retail sales were challenged, as well as North America, Southeast Asia, and West Africa.
Butter (€1.3 billion), cheese (€1.2 billion), and whey ($250 million) accounted for 45% of total dairy export volume, with all three commodities experiencing price decreases in 2023. Ornua’s Kerrygold is expected to be one of the largest butter brands in the US market by the end of 2023. Exports to Southeast Asia were mixed, with cheese volumes in Japan remaining consistent, which he described as a’really important’ market for Irish cheese outside of Europe.
The Middle East also performed well, with the value of Irish dairy exports increasing 24% to €390 million. Retail sales in Saudi Arabia are thought to be a major driver in the region. China’s demand is expected to return in 2024, with infant formula export figures holding up better than in previous years. Kennedy expects the challenges of last year to be mitigated this year, with global stocks lower than in 2023 and more affordable.
Demand for environmentally friendly dairy products is also expected to continue, with international customers increasingly seeking low-carbon footprint, highly sustainable dairy ingredients. Bord Bia remains optimistic about the future, as it prepares to launch a new four-year strategy later this year.
