Chairman’s Statement
Eamonn Carroll Chairman
2020 was a year of true uncertainty and an extremely challenging year for all industries due to the global pandemic and the dairy industry was no different. Our dairy sector and our member co-operatives showed great resilience in navigating the huge challenges of 2020. Global performance Despite this, Ireland’s dairy sector again exceeded other food sectors as a pillar of Irish food and drink exports. Irish dairy exports exceeded €5bn for the second consecutive year in 2020 securing its place as Ireland’s largest export food category. Further expansion of the Irish milk pool is forecast in 2021 combined with growing demand for dairy in global markets. Sustainability considerations are evolving and changing dietary habits are impacting the future of food. Irish food and drink exports for 2020 were worth €13bn, a 2% decline on the 2019 figure. This slight decline comes in the context of the largest disruption to normal market operation globally since the end of World War II. Dairy markets proved resilient throughout the pandemic, aided by buoyant cheese and butter retail sales and strong demand for milk powders. Outstanding retail sales helped to offset the decline in foodservice with demand stronger overall. Global milk supply increased by 1.7%, which saw stable European farm-gate prices. Irish milk price saw a marginal increase above 30 cent per litre. Looking to 2021, global milk output is likely to continue growing, which will increase the supply of product to global markets, particularly from the US. Volatility in global markets is likely to be a feature of 2021 as regional lockdowns dictate demand. Purchasing power in key economies will also be a factor as we prepare for the economic impact of the removal of Government stimulus programmes in key markets, particularly in the US. Globally, higher feed costs and environmental considerations will impact supply.
Dairy markets proved resilient throughout the pandemic, aided by buoyant cheese and butter retail sales and strong demand for milk powders. Dairy business with the UK was sustained throughout 2020, despite Brexit trade negotiations injecting uncertainty into trade with our largest trading partner. In late December a Trade and Cooperation Agreement was struck between the EU27 and the UK removing the risk of immediate imposition of tariffs and quotas in 2021. Decline in demand because of Covid-19 restrictions and job losses drive the 5% decline in the value of exports to the UK while exporters made contingency plans for a no-deal Brexit. This included extensive participation in customs readiness schemes developed and delivered by Bord Bia alongside entire supply chain assessments and customer engagement in the UK.
2 The National Dairy Council | Annual Report 2020
