Heather Humphreys (Cavan-Monaghan, Fine Gael)
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226. To ask the Minister for Agriculture, Food and the Marine if he will consider carrying out an in depth analysis to ascertain the reason for the drop in cattle prices; the impact it is having on the beef farmer and the beef industry; if he will consider reviewing the Harvest 2020 targets to take account of current market trends; and if he will make a statement on the matter. [10170/14]

Simon Coveney (Cork South Central, Fine Gael)
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Market conditions in the cattle sector are analysed and examined on an ongoing basis by my Department and Bord Bia. Despite continued slow demand from some key export markets, prices for prime steers and heifers have remained relatively stable even though the combined kill for these categories has increased by 11% to date in 2014 compared to same period in 2013. While the young bull trade is challenging at present as age and weight issues continue to adversely affect demand, the number of young bulls slaughtered at DAFM-approved plants has increased by 58% from 4,200 head in week 1 of 2014 to 6,700 head in week 7.

Higher factory 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. The Irish beef industry is highly export dependent 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.

Delays in slaughtering some animals combined with a weakening of prices for those outside market specifications undoubtedly put pressure on producer 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. Although I have no function in relation to commercial transactions between the meat factories and their suppliers, I met representatives of both sides in the last week to discuss the current situation. As a result of that interaction, I am hopeful that the factories, in collaboration with the farming bodies, will be able to resolve the various issues that have lately caused difficulties for some producers. At my request, Meat Industry Ireland (MII) member companies will ensure that their livestock offices are open to deal with farmers with any particular queries or concerns on the marketing of their stock. MII member companies have made available contact details for each their main plants to enable farmers to phone them directly.

The relationship between processors and farmers is an interdependent one. Ultimately, it is the responsibility of both sides working together to manage the type and volume of cattle being brought to market so that the supply chain does not undermine the viability of beef production systems for either winter finishers or suckler farmers. The current situation clearly underlines the need for industry operators to improve communication on market trends and signals throughout the supply chain. An industry-led solution to the current uncertainty is essential to restoring confidence in the sector and I would encourage the various stakeholders to continue their efforts to reach a mutually acceptable outcome.

With regard to the Food Harvest 2020 (FH2020) targets, the original goal to increase the output value of the beef sector by 20% was subsequently increased to 40% on the recommendation of the industry-led Beef Activation Group. The various targets under Food Harvest 2020 are monitored and reviewed on a continuous basis by the High Level Implementation Committee which I chair, and any modifications to the strategy for the development of the sector can be made as appropriate.

For example earlier this month 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 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.