Bernard Durkan (Kildare North, Fine Gael)
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To ask the Minister for Agriculture, Food and the Marine the extent to which he has continued to monitor developments in the beef, lamb and dairy sectors in the context of world trade with a view to ensuring the future well-being of Irish and European products on world markets; and if he will make a statement on the matter. [40648/12]

Simon Coveney (Cork South Central, Fine Gael)
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In addition to meeting my European counterparts at Council level on policy matters periodically throughout the year, developments in agricultural commodity markets are constantly monitored and discussed at monthly meetings of the management committee for the relevant sector at which Ireland is represented by officials of my Department. In the context of internal market and third country trade, DG Agriculture & Rural Development produces regular market forecasts for various agricultural sectors and its most recent short-term outlook for the meat and certain other sectors was published in June 2012.

Dairy sector

The June report predicted increased EU production and exports for most dairy commodities but it is important to note how quickly the market can change. Extreme weather in different parts of the world this summer has had a significant impact on global dairy markets, as rising grain prices have led to an increase in dairy commodity prices.

Volatility in dairy prices is caused by imbalances of supply and demand in international markets, which are cyclical in nature. However, while there will always be short term fluctuations in dairy prices, the medium term prospects for global dairy markets are good. Growth in global population and wealth is forecast to stimulate strong levels of demand for dairy products. Against that background, I believe that prospects and opportunities for the dairy sector will expand significantly over the coming years. My Department and its agencies will continue to play their part in providing an appropriate framework to support the development of this critically important industry.

Beef Sector

According to its analysis of the overall beef trade, the Commission expects that weak domestic demand and exchange rate movements will cause EU imports to fall by almost 6% in 2012 followed by a stabilisation in 2013. EU beef exports will be affected by a significantly reduced export capacity in 2012 and 2013 because of a shortage in domestic supply. As a result, the EU will revert to a being net beef importer in volume terms in 2012 and 2013 after the exceptional trade surplus recorded in 2011.

The EU cattle population, which was estimated at 86 million head in December 2011, has declined at an average rate of 1.1% since 2008 and this trend should persist in the near future. EU beef and veal production in 2012 is expected to decrease by 3.5% compared to 2011 and to remain largely unchanged in 2013. A consequence of these supply constraints is that EU beef prices are likely to remain at record levels for the remainder of 2012. High beef prices combined with weak internal demand will lead to a reduction in beef and veal consumption in 2012 before stabilising at the lower level in 2013.

Ireland is over 600% self sufficient in beef production and exports around 93% of slaughter output with volumes averaging approximately 0.5 million tonnes annually over the past 3 years. The outlook is for continued buoyant cattle prices on the basis that total prime cattle throughput at Department-approved meat plants is down 16% for the year to date compared to the same period in 2011. However, data on calf birth registrations in 2011 and 2012 indicates that prospects for production growth in the beef sector in 2013 are positive. Increased supply availability can be expected to result in increased beef output and exports in the short run.

Lamb sector

According to the latest forecasts from the European Commission, the European sheep flock is expected to remain relatively stable in 2012 with slaughterings also at similar levels to last year. There are uncertainties about consumption levels due to the economic situation.

Regarding the sheep sector in Ireland, slaughterings for the year 2012 up to week ending 16 September are up by 7% on the corresponding period in 2011. This points to an increase in production following the recovery in the breeding flock which was noted in 2010 and 2011. Factory prices for the year 2012 to date are approximately 2% below 2011 levels for the corresponding period. This reflects the competitive pressures in the market.

The vast majority of Irish sheepmeat is sold on EU markets, with France being the single most important export market. Although almost all Irish sheepmeat has traditionally been sold on European markets, there has been more interest shown by exporters in third country markets in recent years. My Department, in co-operation with Bord Bia and with the assistance of the Department of Foreign Affairs, has been active in negotiating access to key third country markets. In recent years we have succeeded in gaining access for Irish sheepmeat to Morocco, Tunisia, South Africa and Singapore and we are continuing to work on other possibilities. I am confident that this work will give the sector the options it needs to ensure the best returns possible going forward.