Michael Healy-Rae (Kerry South, Independent)
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623. To ask the Minister for Agriculture, Food and the Marine his views on correspondence (details supplied) regarding losses for winter finishers; and if he will make a statement on the matter. [7827/14]

Simon Coveney (Cork South Central, Fine Gael)
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Aggregate cattle supplies at Department-approved meat plants in early February 2014 are running at 12,000 head (or 7%) ahead of the corresponding period in 2013 with strong increases recorded in the steer, heifer and cull cow categories. This higher throughput has led to factories giving preference to certain types of stock that are better suited to the requirements of their retail customers. Prices for ‘in-spec’ steers and heifers are relatively stable. While the young bull trade is challenging at present as age and weight issues continue to affect demand, the young bull kill has increased by 60% between week 1 and week 6 of 2014.

The Irish beef industry is hugely dependent on exports and the need to ensure that it is producing efficiently for overseas markets cannot be ignored. Finished cattle prices continue to be impacted by weak demand, particularly for manufacturing beef, in key export markets. One of the main difficulties in marketing young bulls over 16 months at age is that these animals are outside the specifications preferred by the UK market. This is a major disadvantage at present because the UK market has effectively become the highest-priced beef market in the EU.

With regard to winter finishers, it must be remembered that most cattle are traded several times during their lifetime based on their perceived value to producers and the price at which they are bought and sold is determined by supply and demand in the marketplace. The particular difficulties experienced by producers who market cattle over the winter period were considered by the Beef 2020 Activation Group, which was established to set out the actions necessary to achieve Food Harvest 2020 targets. The Group’s report noted that a more widespread use of contracts would provide price certainty for winter finishers but acknowledged the problems faced by the processing industry in moving to a generalised contract system.

Bull beef production is a specialised system of production and delays in young bull slaughtering undoubtedly put pressure on producer profit margins. However, neither I nor any Agriculture Minister can interfere in a trade that is cyclical in nature and prone to short-term price fluctuations. I am, of course, entirely sympathetic to those farmers still facing difficulties in getting their cattle slaughtered but I have no function in relation to commercial transactions between the meat factories and their suppliers.

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 so that the supply chain operates for the benefit of both parties and does not undermine the viability of beef production systems for either winter finishers or suckler farmers. The current situation strongly underlines the need for the industry to improve communication on market trends and signals along the supply chain. An industry-led solution to clear the backlog of bull beef is essential to restoring confidence in the sector and I would encourage the various stakeholders to engage constructively in discussions on the issue.

Recognising the importance of maintaining confidence in the beef sector, I recently 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 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.