Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

6. To ask the Minister for Agriculture, Food and the Marine why Irish beef exports to the United States of America in 2015 were significantly down on the target he set in February 2015; and if he will make a statement on the matter. [2309/16]

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Last year, the Minister announced the opening of the American beef market with great fanfare, and predicted that the exports would be worth between €50 million and €100 million. The truth is far different. Only €11 million worth of beef was exported to the US. How did this discrepancy arise and how did the Minister get it wrong by such a massive factor?

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am not sure we got it wrong at all. Ireland received a major reputational boost for its beef sector in 2015 as the first EU member state to gain access to the US market which was opened to Irish beef exports from January 2015. Ireland remains the only EU member state to have secured this access, and six plants have been approved to export. As with any new market, it takes time to build reputational brand and a customer base, and the real time to assess its value is when these are bedded down.

This value is still being bedded down. Beef exports between Ireland and the US at the end of December had increased to an estimated 1,800 tonnes, which has a value of between €11.5 million and €12 million. This represents an exceptionally strong start to this trade, considering the first exports were only made in March 2015 and some of the plants were only approved for export as recently as September.

In addition, the trade is currently confined to the market for intact cuts, as we currently await approval for beef exports intended for grinding; in other words, manufactured beef. Another factor is that US beef prices have fallen back from the peaks recorded in early 2015, which makes beef imports less competitive. More important, the relatively high prices available for beef in Europe in 2015, particularly in the UK, meant US buyers may have been priced out of the market, as Irish exporters chose to send product to more valuable markets in the UK and on the continent. While the volume of beef exported to the UK in 2015 was largely the same as in the previous year, it increased in value to represent 54% of the exported beef from Ireland compared to 47% the year previously. This is helped by a strong sterling and a weak euro.

This is a significant market and we are now in it. We are developing and expanding it but we will always sell beef to the highest price market. The Deputy said that I indicated we would have €50 million worth beef in the US last year and I have not secured this. The market dictates where the beef goes. My job is to open these markets in order that the options are there for the industry to sell into the highest price market. My job is also to open markets for both processed beef as well as for prime cuts and we are close to doing that with the US. The US is still an exciting market. It is the largest beef market in the world and we will sell a significant volume of beef there but it depends on the year and the price.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister is almost giving out to me as if I had made the prediction. He made the predictions, not me. As he said, 1,800 tonnes of beef were exported to the US. This compares with 270,000 tonnes into Britain. It turned out to be a small market. Will this market expand other than for prime cuts or is the only way to achieve the volumes and sales he mentioned through the export of manufactured beef? Does he accept that manufactured beef is a commodity that does not fetch premium prices?

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We need both. Industry representatives places significant importance on two factors, both of which we are close to achieving. The first is the export of manufactured beef into the US and the second is the export of beef to China. A Chinese team of inspectors is in the country currently.

When I predicted volumes and value for the US market, we thought we would get manufactured beef in at the same time as prime cuts but that did not happen, which is a part explanation for the volume. Prime cuts comprise a much higher value but much lower volume. We will get manufactured beef into the US shortly and there will be a significant increase in volume. The industry says there is a market for this and, therefore, the value will increase as well. We need to maximise the value of the entire carcass, which means exporting manufactured beef products as well as prime cuts. The US has the capacity to buy both and pay a premium price for both.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
Link to this: Individually | In context | Oireachtas source

We have only 20 minutes left and we have only done six questions.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

This is my final question on the final day of questions in this Dáil before we all go before the people.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
Link to this: Individually | In context | Oireachtas source

I do not want it to be a record.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Will the Minister predict the volume that will be sold into China in an average year once he opens that market?

Simon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy likes to hold me to exact predictions. He should consider what has happened with pork and dairy products in China over the past five years. People say the Chinese economy is supposedly slowing down but exports of dairy products from Ireland into China increased by 40% last year, with the value increasing by 25%. China represents a vast opportunity because it has a huge population. We can sell into restaurants and hotels there, which is a premium market. The industry is interested in that and we will make progress on getting in there this year. The volume and value of beef exports to China will be determined this year by when we get into the market. It could be in the first or second quarter or the second half of the year. We will have to wait and see. It is up to the Chinese but we are working well with them.