Martin Kenny (Sligo-Leitrim, Sinn Fein)
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5. To ask the Minister for Agriculture, Food and the Marine the way his Department will address the increases in the cost of production of milk in order that these costs are not passed on to consumers in supermarkets; and if he will make a statement on the matter. [13672/25]

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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This relates to the increase in the cost of production, particularly in the milk sector. The dairy sector stated last week that it had serious issues and was going to have to pass the high cost of production on to the consumer. The dairy sector, which has been important for Ireland, especially in terms of exports, will be looking at what happens tonight across the water, given exports of Kerrygold and how Kerrygold is the second largest selling butter in the United States. The threats that come from all of that are serious.

Martin Heydon (Kildare South, Fine Gael)
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I agree. Everyone is concerned about what will happen with the tariffs from the United States and the impact they will have on our agrifood sector. America is our second biggest market. We export €2 billion worth of agrifood and drink products to there, with butter and dairy being a key component of that, the butter market alone accounting for nearly €500 million. Of the 59,000 tonnes of butter that the EU exports to the US, 51,000 tonnes comes from Ireland. It is the pride of our Kerrygold brand that it is in such a premium position in the US market. This is why, next week, I will travel to the United States on an agrifood trade mission to meet political representatives in Washington, Irish agrifood companies and American companies that engage with us greatly.

To make sure we can offset the worst impacts, we continue to engage at European level with our counterparts as well. The Tánaiste, as the Minister with responsibility for trade, has dealings with the Commissioner. With my role in the Agriculture and Fisheries Council in Brussels, we continue to make every point about the direct impact that tariffs and countermeasures could have on our agrifood sector.

On the specific question, as the Minister for agriculture, I do not have a role in setting or controlling prices for any commodity, but working with the Minister of State, Deputy Grealish, I have responsibility for working on new market development and trade, making sure we open more opportunities for Ireland, continue to enhance the markets we are in and grow the value added in those places, and continue to seek new markets so that we are never dependent on one individual market. This week is a good example, as Brexit was before, of why we do that.

As part of its role in supporting the sector, however, my Department monitors developments in prices received and costs borne by Irish farmers. The Central Statistics Office reports on a monthly basis agricultural outputs, trends and prices paid to farmers for their produce, and agricultural input prices paid by farmers for purchases of goods and services. Over the 12 months to January 2025, the overall agricultural output price index, which is prices, rose by 20%. The first monthly indications for 2025 are positive, with output prices rising by 2% compared to the previous January and input costs falling by almost 5%.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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I suppose it goes back to the old adage that the farmer is the one person who pays a retail price for his or her inputs and takes a wholesale price for his or her outputs. That is the crux of this issue. The cost that farmers have to pay for fertiliser, feed, diesel for the tractor or whatever is constantly climbing, yet they see their margins getting tighter and tighter. This is the issue at hand. While new markets will assist, we need to be going for the top shelf. We need to make sure we are getting the top price for the very high-quality product we export all over the world. Unfortunately, that has not always been the case. We need to work harder to make sure that we can come up with innovative means of reducing the cost for farmers as much as possible while also increasing the price they get for the product they produce. Too often, it has been the case that the people in the middle make most of the money. It is the farmer that takes all the risks, gets up at night to make sure the cow calves and looks after the lambs. The farmers do all of that work, yet they take the least when it comes to the squeeze in the market.

Martin Heydon (Kildare South, Fine Gael)
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That is why new markets and continuing to grow our market share in existing markets is so important. Our job in the Department of agriculture is to meet all of the regulatory requirements of other countries so that we can can gain market access and trade there.

It is then up to the Irish food processors and food companies to see that the price they are getting for Irish farmers’ produce is the best they can get. The more markets they have open to them, the more opportunities they have. Not filling a market that we open with produce straightaway is not a sign of failure. My Department has achieved by giving a range of options so farmers’ produce can yield the best possible return. At the heart of Food Vision 2030 is getting the greatest return for our produce and adding value.

At present, the current trends for dairy farmers are positive with regard to input and output prices. Milk experienced a significant agricultural output price increase of 33% in the 12-month period to January 2025. In the same period, the price of agricultural inputs fell by 3.7%, with notable reductions in the prices of electricity, feed and fertilisers.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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Yes. I am aware that there has been a slight improvement in that input costs have decreased from what they were when the war started in Ukraine. That was really the time that we saw them skyrocket through the roof. The market has settled a little but farmers are still paying very high prices, particularly for inputs such as fertiliser. While I accept that it is not the Minister’s job to set the price of anything, a greater effort needs to be made to ensure that we not only market our projects to get the best price for farmers but also assist the industry to achieve the lowest input costs for farmers so they can increase their margins. I am referring in particular to the costs of feed and fertiliser.

Martin Heydon (Kildare South, Fine Gael)
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The value of agricultural output rose by 8% to €12.2 billion in 2024. This was driven mainly by a 17% increase in milk prices as milk accounts for one third of the value of agricultural output overall. These trends can change, however. As we know, there is considerable volatility in the sector and this presents a really big challenge for our farmers and food industry. My Department closely monitors the trends, reflecting the volatile nature of input and output prices in the agrifood sector.

The overall strategy, Food Vision 2030, has four interlinked missions at its core, one of which is ensuring the resilience of primary producers. A number of actions have already been taken to improve the position of farmers in the supply chain in recent years: increased market transparency reporting, including the reporting of the weekly selling price for drinking milk; the introduction of the Agricultural and Food Supply Chain (Unfair Trading) Regulations 2023; and, obviously, the establishment of the Agri-Food Regulator, which is another key element in bringing transparency to the system and ensuring fairness in the relationship between the primary producer, processor and retailer.