Timmy Dooley (Clare, Fianna Fail)
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498. To ask the Minister for Agriculture, Food and the Marine the actions he has taken to help safeguard livestock farmers against a collapse in bull beef prices by 30 cent to 50 cent per kilogram or €100 to €150 per head since mid-December; if he will call in the beef processing industry and demand that it restore price and competition to bull beef prices; and if he will make a statement on the matter. [6472/14]

Simon Coveney (Cork South Central, Fine Gael)
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Market conditions in the cattle sector are monitored on an ongoing basis by my Department and I am aware of reports that some sellers are experiencing difficulties in trading and moving stock particularly those animals that do not qualify for the industry's Quality Payment System. Prices for prime steers and heifers have remained relatively stable but the young bull trade is challenging at present as age and weight issues continue to affect demand.

Aggregate cattle supplies at Department-approved meat plants to the end of January 2014 are up almost 10% on the corresponding period in 2012 with strong increases recorded in the steer, heifer and cull cow categories. This higher throughput is partly a result of cattle becoming fit for slaughter earlier than in previous years leading to a situation whereby factories are giving preference to certain types of stock that are better suited to the trade specifications demanded by their retail customers.

Cattle prices are determined by the dynamics of supply and demand in the marketplace and I have no function in relation to commercial transactions between the meat factories and their suppliers. Rather, it is the responsibility of the industry – in this instance, processors and farmers working together – to manage the type and volume of cattle being brought to market such that the supply chain operates for the benefit of both parties and does not undermine the viability of bull beef production systems for either winter finishers or suckler farmers. I understand that producer and meat processor representatives have recently engaged in discussions with a view to resolving the short-term oversupply of young bulls. An industry-led solution to clear the backlog of bull beef is essential to restoring confidence in the sector and will hopefully resolve the current difficulties for farmers.

I fully recognise the importance of maintaining confidence in a sector that has benefitted from historically high price levels in recent years. Earlier this week, I announced the operational details of an investment package worth up to €40m to beef farmers in 2014. This package will include a €23m for Beef Genomics Scheme, €10m for the Beef Data Programme, €5m for the Beef Technology Adoption Programme and €2m in residual payments under the Suckler Cow Welfare Scheme.

The Genomic Scheme is a particularly important innovation that it utilises cutting-edge science developed by the Teagasc research facility at Moorepark in collaboration with the Irish Cattle Breeding Federation (ICBF). The use of genomics in dairy animals has helped transform cattle breeding in that sector as well as delivering tangible gains for efficient farmers. Introducing this technology for the suckler sector will help to improve the genetic quality of the national beef herd and to increase productivity and profitability at farm level.

The scheme will provide a payment of €40 per calf to participants in return for genotyping a selection of their animals specified by ICBF. Genomic selection involves taking an animal's DNA sample and sending it to a laboratory to assess its performance traits. Farmers can use this information predicting the genetic merit of their stock to inform their breeding and selection decisions. Application forms for the scheme will issue to farmers over the coming weeks.

The Government's investment is a strong vote of confidence in the suckler beef sector. It exemplifies the smart, green growth initiatives envisioned in the 2020 strategy and, coupled with additional support measures under the new Rural Development Programme, will underpin the development of a sustainable beef sector with long-term growth potential.

Timmy Dooley (Clare, Fianna Fail)
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499. To ask the Minister for Agriculture, Food and the Marine the actions he has taken to close the very large and unacceptable beef price gap between Irish cattle prices and cattle prices in our largest export market, Great Britain, which is now in the order of 80 cent per kilogram or more than €300 per animal; and if he will make a statement on the matter. [6473/14]

Simon Coveney (Cork South Central, Fine Gael)
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While my Department has a role in monitoring and reporting on cattle prices I have no function in relation to commercial transactions between meat factories and their suppliers. Rather this is the responsibility of the industry – processors and farmers working together – to manage the type and volume of cattle brought to market so that the supply chain operates for the benefit of both parties.

I am not therefore in a position to influence the price paid for cattle either in Ireland or indeed the United Kingdom, particularly in a trade that is cyclical in nature and prone to short-term price fluctuations. Furthermore, successive reforms of the Common Agricultural Policy have involved a shift to more market-oriented policies that move away from price supports and towards direct payments to farmers.

The UK is approximately 80% self sufficient in its beef requirements and is, by a significant margin, the main market of Irish beef accounting for around 50% of exports in volume terms. Trade with the UK is impacted by fluctuations in the euro/sterling exchange rate and the extent of Britain's import requirement which is forecast to increase in the short run consequent on a continuing decline in domestic beef production. The strong UK cattle prices reflect a fundamentally tight supply situation. The total number of prime cattle slaughtered at UK abattoirs during 2013 fell 2% on the year to 1.93 million head leaving the UK prime cattle kill for the whole year at its lowest point since at least 1970 when records began. However, with the UK cattle herd at its lowest point since 1948, it is likely that these slaughter levels are the lowest in approximately 65 years.

A number of factors have also been identified to account for the differential between Irish and UK cattle prices. These include a British consumer preference for indigenous beef product. In any analysis of comparative prices, it must also be recognised that UK cattle prices are currently among the highest in the EU. Moreover, a price differential makes Irish beef products competitive in the UK market such that Ireland supplies the bulk of the UK's import demand notwithstanding additional logistical and processing costs incurred in shipping to that market.

It is correct to say that Irish beef exports into the UK tend to command a lower value per kilogram than domestic British beef but it is equally true that the prices achieved there would be well ahead of equivalent beef prices across most of the Continental EU markets where finished cattle prices are much lower. For example, Irish cattle prices remained ahead of EU levels in 2013 averaging around 106% of EU R3 male cattle prices. It is expected that the Irish beef sector will be well placed to maintain this momentum in 2014 despite some further increase in supplies.