Like many involved in Irish agriculture, dairy farmer Sean O'Leary is adopting "a wait and see approach" before making any predictions about how Brexit is going to affect his dairy operation in Mournabbey near Mallow in north Cork.
Married to Fidelma with three children, Daniel (19), Orla (16) and Valerie (12), O'Leary milks 130 Friesian cows at his 150 acre farm at Gursaneelig, Burnfort in Mourneabbey and, like many Irish farmers and others, he has spent the weekend following the debate on Brexit and its implications.
“Some 41 per cent of Irish agricultural exports go to the UK so clearly Brexit is going to have some impact. But how exactly that is going to pan out yet I’m not sure anybody knows but clearly with Britain being such a major market, it is obviously a concern to Irish farmers,” says O’Leary.
According to O’Leary, there are two distinct issues to be addressed: the first is short term and relates to currency fluctuations with the value of sterling dropping; while the second is long term and relates to Ireland’s trading relationship – as part of the EU – with Britain outside the union.
“The short term issue is the currency one and there was a lot of panic on Friday when the value of sterling dropped but we saw a fall in the value of the euro as well and the key factor here is their strengths relative to each other,” says O’Leary who is chairman of the IFA dairy committee.
“Once their position to each other doesn’t change too much, ie the value of the sterling relative to the euro, we should be okay. The biggest negative for us as exporters to the UK would be if the euro increased in value against sterling which would affect the competitiveness of our exports.”
Diary farmers
But while the currency fluctuation issue is an immediate concern, the longer-term issues regarding tariffs and what sort of trading deal Ireland will have with the UK is of particular concern to dairy farmers.
“Milk prices are disastrously poor at the moment – there are some signs we may have reached the bottom – but you certainly don’t want to add another negative to that with Irish dairy exports to the UK becoming uncompetitive because the UK is opting out of the EU.
“Cheese would be our biggest dairy export to the UK and the cheddar cheese market there would be very important for us – Pilgrim’s Choice is the second biggest selling cheddar in the UK and it’s made using a lot of Irish milk by a company owned by Ornua which used to be the Irish Dairy Board.”
O'Leary himself supplies milk to Dairygold which supplies into the UK market but he doesn't expect the trade into the UK to stop unless the UK decides to do some preferential trade deal with countries like New Zealand, though he believes Ireland's image as a green producer will stand to it.
“There is a huge demand in the UK for beef and dairy but there is a danger that with something like Brexit you might get a sort of resurgent nationalism where consumers will favour products from their own country rather than from Ireland – that’s always a worry as well.
“But it’s not like the trade will stop tomorrow and Irish product will get some sort of a premium over other countries in the UK – our green grass production goes down well in the UK and you would imagine that would hold up and continue to stand to us.
“You wouldn’t want to over-exaggerate the negative – ultimately it will come down to the issue of tariffs but it’s not a situation where Ireland can do a bilateral deal with UK – our hands are tied in the sense that any trade deal with the UK would have to be done at EU level.
"If the attitude of the EU is not to make things easy on the UK, they mightn't do a favourable deal which would obviously have a negative effect for us but Enda Kenny said we wanted do a deal that doesn't punish the UK because we both need to import and export into each other's territories."
