Growing the success of Irish food & horticulture

AIDAN COTTER

CHIEF EXECUTIVE

BORD BIA

28 JANUARY 2009

Growing the success of Irish food & horticulture

6th January 2017

Review & Outlook of the Global

Sheep Meat Market

Declan Fennell

Growing the success of Irish food & horticulture

€1 = stg£0.905 17th October 2016

€1 = stg£0.791 17th July 2014

1. Currency Movements

€1 – stg£0.734 6th January 2016

Source: ECB

Growing the success of Irish food & horticulture

New Zealand Dollar strengthened against Sterling

1. Currency Movements

Growing the success of Irish food & horticulture

Poor oil prices had an impact

on market confidence

Government subsidies were reduced or

removed in some Middle Eastern markets

2. Oil Prices

Growing the success of Irish food & horticulture

3. Religious/Cultural Festivals

Irish live exports reached a 3 year high in 2016 (48,036 head)

Irish sheep disposals at meat export plants surpassed 70,000

mark in the week leading up to Eid al-Adha

Source: DAFM

Growing the success of Irish food & horticulture

BREXIT 4. BREXIT

UK: 95%+ exports destined to EU 27

IRE: 24% exports destined to UK

Competitiveness - stg£ v’s €

Source: Bord Bia/GTIS

Growing the success of Irish food & horticulture

5. Pressure on the Fifth Quarter

Source of photo: Wall Street Journal

Euro

Source: Bord Bia

Growing the success of Irish food & horticulture

Production Challenges:

New environmental standards has lead to a clampdown on tanneries

Market Challenges:

- Poor demand

- Russian market has dried up due to a plummeting Ruble and focus on

domestic product.

5. Pressure on the Fifth Quarter

(skins)

Source of photo: Wall Street Journal

2.67m +3%

+5%

€230m

+5%

+4%

Sheep

Disposals

Average price

Export

Volumes

Export

Value

Despite a challenging global environment

the Irish sheep sector delivered a solid

performance in 2017 +5%

€230m

National

flock

5.17m Head

+1%

49,000 Tonnes

+3%

€240m

Sources: CSO/DAFM/Bord Bia estimates

€4.83/kg

48,000 Head

+49%

Live

Exports

2015 2016

Breakdown of Sheep Disposals Period: 2016 v’s 2015

Hoggets 640,000 682,000 (+7%)

Spring Lambs 1,639,000 1,596,000 (-3%)

Ewes & Rams 311,000 394,000 (+26%)

TOTAL 2,590,000 2,671,000

Source: DAFM wk ending 52 2016

- 43,000 SPRING LAMBS

Origin of Sheep Disposals Period: 2016 v’s 2015

TOTAL 2,590,000 2,671,000

North 331,000 394,000 (+19%)

ROI 2,259,000 2,277,000 (n/c)

2015 2016

Source: DAFM, DARD 06.01.17

Growing the success of Irish food & horticulture

350

400

450

500

550

600

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Cen

t/K

g

2016 Average Price

€4.83/kg (-1c/kg)

Average Sheep Prices 2016

HOGGETS NEW SEASON LAMB

Average €5.19c/kg

Average €4.56c/kg

8c/kg

4c/kg

Source: DAFM

2.5

3

3.5

4

4.5

5

5.5

6

6.5

39088 39453 39819 40184 40549 40914 41280 41645 42010 423752007 2008 2009 2010 2011 2012 202007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

10 Year Trend: Irish Sheep Prices

€3.94/kg

5yr Average (2007 – ’11)

€4.72/kg

5yr Average

(2012 – ’16)

€/kg

Source: DAFM

Growing the success of Irish food & horticulture

2016 Irish Sheep Meat Exports

Source; GTIS/Bord Bia

VALUE: €240m [+4%]

VOLUME: 49,000t [+3%]

DESTINATIONS:

+30 markets

Growing the success of Irish food & horticulture

320

340

360

380

400

420

440

460

480

500

Jan Jan Jan Feb Feb Mar Mar Apr Apr May May Jun Jun Jul Jul Aug Aug Aug Sep Sep Oct Oct Nov Nov Dec Dec

p/k

g

Lamb Crop Total Processed Exports 17.2m 291,000t (-3%) 104,000 t (+10%)

2016

2015

5 year trend

Recovery in UK Prices

Source: AHDB

Growing the success of Irish food & horticulture

Tight Supplies

SUPPLIES

BACK

28.3m lambs (-3%)

---------

600,000 fewer

lambs

Market Positioning

China accounts for

32% of export

------------

Zero tariff rate – Jan ’16

Source: BLNZ

2017 Promotions

Conclusion

Hogget numbers to remain on par with ‘16 | modest growth in the breeding flock

Strong carry over of hoggets | Imported NZ lamb expensive due to currency

Further declines in breeding flock (-2%) | Preference for French Product

Price sensitive | buying in expertise through strategic alliances

Key concerns Brexit and EU quota

Iran – one to watch in 2017!

Review & Outlook of the Global

Sheep Meat Market

Declan Fennell