Shane McEntee (Meath East, Fine Gael)

I am replying on behalf of my colleague, the Minister, Deputy Simon Coveney. I thank my colleague, Deputy Humphreys, for raising this important issue for discussion. I consider the maintenance of an efficient and viable cereals sector in Ireland to be of the utmost importance. In addition to providing an income for growers, it provides the livestock sector with a key source of feeding stuffs.

The EU cereal harvest for 2011 is estimated at 281 million tonnes, somewhat above the five year average, with a marginal reduction in stock levels. World cereal stock levels are forecast to remain unchanged due to balanced global consumption and production. World cereal prices peaked during 2011 but have fallen back in recent months due to increased market concerns about the global financial crisis. In Ireland, the 2011 cereals harvest was one of the best harvests in years, estimated at 2.5 million tonnes, some 22% above the 2010 production levels and well above the long-term average of 2 million tonnes. This record production was due to a combination of factors including an increased cereals area and favourable weather conditions during the growing and harvest seasons, although this did not apply to the people of Donegal who had a hard time of it. National cereal yields in 2011 were the highest recorded for winter and spring barley, with yields of 9 tonnes and 7.5 tonnes per hectare respectively and second highest for winter and spring wheat with yields of 10.2 tonnes and 8.3 tonnes per hectare. Production costs increased during the year but cereal prices remained strong, especially for those who opted for forward selling, with malting barley prices performing especially well. As a result of outstanding yields and good prices, Teagasc estimates an increase of 10% in the acreage sown for winter cereals.

The cereal sector is now entering a period of new market-led opportunities but these are set against significant challenges, including commodity prices trends, the security of food and energy supplies, environmental sustainability and climate change. Against this background, the goals for the sector are to improve competitiveness, profitability and sustainability by increasing yields and to improve product quality while reducing production costs. Achieving these goals will be underpinned by advances in science through knowledge generation and procurement, technological developments and innovation. In this regard Teagasc is providing research, training and advisory services for the sector.

Odlums has a long history in Ireland and has been milling and packing flour for more than 160 years. The original business was established in Portlaoise by the Odlums family in 1845 and has been owned by Valeo Foods since September 2010. The decision by Odlums to close the Dublin Port mill is commercial, taking account of the current challenging market conditions in the industrial bakery flour market. According to Odlums, the mill has been loss-making and unable to compete with low-cost imports especially from Northern Ireland and the United Kingdom.

The company has stated that there is significant excess milling capacity in the United Kingdom which is imported into the Irish market at prices with which Odlums cannot compete. The company continues to produce retail and "at home" baking products in its mill in Portarlington. It points out that locally grown milling wheat remains the major source of wheat for all products produced at Portarlington.

I regret the announcement by Odlums to close the Dublin Port mill and the loss of jobs. However, the Deputy will appreciate that Odlums is a private enterprise and, accordingly, its decision to close the Dublin Port mill is a matter for commercial decision and neither I nor my Government colleagues have any function in that regard.

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