Seanad debates

Wednesday, 26 March 2014

1:25 pm

Photo of Michael ComiskeyMichael Comiskey (Fine Gael) | Oireachtas source

I move amendment No. 1:

To delete all words after “That” and substitute the following:
“Seanad Éireann –
acknowledges:
- the importance of the beef sector to Irish agriculture;
- the ambitious development strategy for the sector set out in Food Harvest 2020 and the Government’s commitment to the full implementation of the strategy;
- the Government’s drive to place innovation and technology adoption at the heart of the growth strategy for the sector;
- the Government’s €40 million investment package for the suckler sector at farm level as part of the 2014 budget and the further supports proposed for the beef sector in the draft rural development programme, 2015-2020;
- the excellent export performance by the sector in 2013;
- the significant efforts by Bord Bia and the Minister for Agriculture, Food and the Marine to enhance the reputation of Irish beef internationally as a premium high-value product; and
- the opening of new markets for Irish beef in 2013 including Iran, UAE and Japan and ongoing intensive efforts to gain access to China, US, Canada and Korea;
recognises:
- the importance of clear and timely communication between beef processors and producers in relation to market specification; and
- the importance of having alternative markets for Irish beef and live animals;
notes:
- the requirement of EU labelling regulations to include country of origin labelling specifications for beef;
- that slaughtering of bull beef in the first 11 weeks of 2014 stood at almost 65,000 head – an increased kill of almost 3% over the same period in 2013;
- the number of live cattle exported to the end of the first ten weeks this year is up 6% over the same period in 2013;
- beef prices in 2013 were 106% of the EU average-prices for 2013;
- the Minister for Agriculture, Food and Marine recently met with both farming organisations and representatives of the meat industry to encourage both sides to find an acceptable situation to the oversupply of beef product and product specification issues; and
calls for:
- a renewed effort by all sides in the beef sector to work together to continue the development of the sector;
- agrifood industry stakeholders to reaffirm their commitment to meeting the targets for the beef sector in Food Harvest 2020.”
I welcome the Minister to the House and thank him for taking the time to debate this important issue. The beef industry has long played a major part in our agrifood production sector. The quality of our beef is renowned worldwide. There has been a drop in beef prices in recent months largely caused by the refusal of processors to slaughter bulls.

Given the drop in the market, it can be said that the Government has not failed to act on the issue or address the concerns of farmers across the country.

Let us first highlight the importance of the beef industry to the country. Specialised beef production is a dominant type of farming in Ireland, with 56% of Irish farmers engaged in beef production. The value of Irish food and drink exports reached €10 billion in 2013 and beef accounted for €2.1 billion of this, representing 10% of the increase in value compared with previous years. Following a 5% rise in output and a similar increase in price since 2007, steer prices as a percentage of the European average have risen from 92% to 99% to date in 2014. In 2013, the Irish price was equivalent to 104% of the EU average price. On average, finished cattle prices recorded a 5.5% increase in 2013. While all of this is very positive, it does not serve to detract from the situation in which we now find ourselves.

In order to understand the current situation, it is important to look at the mitigating market factors. In recent times, beef production across Europe has declined consecutively each year. The volume produced by the EU is estimated to have fallen by 2.2% in 2013, which followed a 4.8% drop in 2012. As a result, the Irish steer price exceeded the equivalent young bull price in France, Germany, Spain and Italy for the majority of the year. In contrast, the UK price for beef has effectively become the highest price beef market in the EU. The UK market accounted for 53% of Irish beef exports in 2013. This was mainly purchased by large supermarkets such as Tesco and Asda. These retail purchasers have very strict specifications on the beef which they purchase. Typically, they seek steers or heifers of less than 30 months of age, or alternatively, young bulls of less than 16 months.

As well as finished cattle, we also export an important amount of live cattle each year. Cattle exports increased by more than 30% in 2013, with an overall value of €157 million. Major factors for this increase were that Irish calf prices became more competitive than previous years, and exports to Libya commenced for the first time since 1996. So far this year, live exports have increased by a further 7%. Weekly shipments go to the Netherlands, Belgium and Spain. However, we also export live animals to the UK. Exports to Northern Ireland declined by 13% in 2013, while just over 11,000 Irish cattle were exported to Britain. The practical reason for this significant decline is that it is no longer viable to export live cattle to the UK for the large retail markets. These purchasers want beef that is deemed British, which means born, reared and slaughtered in the UK, or Irish, which means born, reared and slaughtered in the Republic of Ireland, rather than beef cattle from Ireland that were reared in Ireland and slaughtered in the UK. We should be trying to slaughter as many animals here as possible to keep with our own processors. It is clear from this that there are floundering continental markets in young steers, while the prosperous UK market is seeking bull beef under 16 months.

The Government is trying to work with processors to increase the number of animals slaughtered here. Currently, up to 600 bulls are slaughtered weekly in Ireland, and we face problems while the market is not currently seeking bulls over 20 months. The market demands bulls that are less than 16 months, and when the bulls cross that age, we have a difficulty. The Government is supporting the bull beef industry in acting on farmers' concerns. The Food Harvest 2020 strategy sets out a vision for the future development of the beef sector that was agreed by stakeholders, including farm bodies and processors. The original target of the beef sector was to increase the value of exports by 20% by 2020. This target is achievable, depending on increased communication, collaboration and consolidation across the supply chain. Food Harvest 2020 initiatives have had a positive impact on the beef sector. These initiatives include the targeting of more than 450,000 calves under the voluntary phase of the BVD programme and the increase in the number of advisers dedicated to beef in Teagasc.

The Government has also invested largely in the beef sector. The Minister recently announced an investment package worth up to €40 million to beef farmers in 2014. This includes investment in areas such as genomics. This will transform cattle breeding. The rural development programme will be a key factor in maintaining and enhancing the competitiveness of the Irish food sector. Much effort has been made by the Government to enhance the international reputation of Irish beef. Since his appointment, the Minister has been very successful in developing and enhancing the trading links of this country. We have once again started exporting to Libya. The US lifted its ban on the importation of beef from the European Union. The Minister is hopeful that the BSE ban in China will be lifted soon.

It is important to note that ultimately, the market price is determined by the sellers, purchasers and processors. While the Government is in constant communication with all members of these sectors, we cannot directly interfere with the function of the market. The average beef price change this year so far is a 1.8% reduction. We have an oversupply of a product at the moment, namely, bull beef over 16 months. Market demand for this product has collapsed and we need to learn more from the market in looking for it.

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