Written answers

Tuesday, 23 September 2014

Department of Agriculture, Food and the Marine

Beef Industry

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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254. To ask the Minister for Agriculture, Food and the Marine the extent to which losses incurred by producers involved in rearing bull beef has served a means of making future provision to ensure such losses are not repeated; and if he will make a statement on the matter. [35765/14]

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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As the Deputy is aware , difficulties relating to the production of young bull beef in Ireland became prominent towards the end of 2013 and the early months of 2014. Bull beef is not a traditional system in Ireland; our grass fed steer and heifer production systems suit our climate and land availability. Producing quality young bull beef that meets specification requirements for meat factories requires intensive periods of meal feeding and finishing within a short timeframe, thus adding input costs to the producer. Feedback received by Bord Bia from customers in various Continental markets consistently indicates that they highly value prime steer beef coming from grass-based production systems. Young bull beef is seen as more of a commodity and tends to sell for a lower price. There will continue to be niches, in markets like Italy, where there is demand for a certain amount of young bull beef. However, Irish beef producers should be mindful that this is a specialised market for a restricted carcase specification and that it has become more price competitive in recent years.

It is likely that more farmers will revert to traditional steer beef finishing because Irish steers are a unique selling point for our beef industry that enables us to achieve premium prices for that product. In the domestic cattle market, the relationship between processors and producers is a highly 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. I note that Michael Dowling, in his recent report to the Beef Roundtable, suggested a greater role for contracts in the production of young bulls; this requires further exploration on both sides. It is essential that any farmer considering a move to produce bull beef has a clear signal and understanding from his processor that a market exists for this product.

Current market conditions clearly highlight the need for industry operators to improve communication on market trends and signals throughout the supply chain. As the Deputy is aware, I established a Beef Roundtable earlier this year to facilitate such discussions. One such outcome arising from this Roundtable involves better and more timely communication between processors and producers aimed at transmitting early and clearer market signals which bring about more strategically planned sectoral responses. I would encourage the various stakeholders to continue their efforts in that regard.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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255. To ask the Minister for Agriculture, Food and the Marine the extent to which levels of beef consumption have altered throughout the various markets for Irish beef in the course of the past 12 months; the measures taken or likely to be taken to address the consequent losses to producers; and if he will make a statement on the matter. [35766/14]

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Ireland is the fifth largest net exporter of beef in the world and we export 90% of the beef produced here . Most of our exports go to high value EU markets and Irish beef is now listed with more than 75 high-end retail chains across the EU. As with our competitors, Irish beef is susceptible to changes in consumption levels across Europe , and especially in the UK as our biggest export market. Beef consumption has dropped by over 5% in Europe since 2010 , with an inevitable impact on the beef supply chain in Ireland. Much of this change is due to increasing price competition from other protein meats particularly poultry. At the same time however, the Government’s response to this shift, together with initiatives by producer and processors, has seen beef exports grow to just under €2.1 billion last year, reflecting a 5% rise in output and a 4% increase in average prices. This growth is a result of concerted action by Government, Industry and producers to develop our product offering .

I have personally led trade missions to China, the US, Algeria and the Gulf Cooperation Council (GCC) countries in the Middle East to expand the range of markets for Irish beef. There have been noteworthy successes in securing market access from authorities in Japan, Singapore, Egypt and Iran. This year to date we have agreed access terms with the Lebanon, Philippines and Namibia. We are finalising technical arrangements with the US authorities which should see exports of Irish beef to the US commence shortly. I am also optimistic of making further progress with beef market access to China in the coming months.

Bord Bia is also continuing its investment in market development and promotion, including through an additional €0.5 million which I announced as part of the Beef Roundtable discussions. This €0.5m allocation is in addition to the €9m budget spend per year by Bord Bia on marketing of Irish beef internationally. Bord Bia’s strategy for Irish beef is built around differentiation and premiumisation, and focussing on the key attributes of Irish beef: environmentally sustainable, grass-based production systems; full traceability; quality assurance at all stages; and superior eating quality. Among Bord Bia’s key initiatives this year is the continued development, promotion and marketing of its Origin Green initiative. This is designed to establish Ireland as a world leader in sustainably produced food and drink

Finally, I should note that the outlook for consumption in the key markets for Irish beef is positive. Furthermore, the decline in beef consumption across the EU is expected to be reversed in the coming years, with medium term forecasts indicating increased consumption in the coming years. My focus is on positioning the industry here to avail of the opportunities which this brings.

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