Written answers

Tuesday, 31 March 2015

Department of Agriculture, Food and the Marine

Agricultural Production

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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359. To ask the Minister for Agriculture, Food and the Marine the extent to which he continues to monitor the future growth prospects for the beef, lamb, pigmeat and poultry industries, with particular reference to the fluctuation in import costs; and if he will make a statement on the matter. [13404/15]

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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The reply is as follows:

Beef

I am pleased to note that prices at the end of last week have increased 15% since last September and are now 6% higher than in the same point in 2014. Current beef prices in Ireland stand at 103% of the EU15 average. As of the end of last week, the average prices paid (excluding VAT) for an R3 steer stood at €4.03/kg and an R3 Heifer at €4.14, an increase on the previous week and almost 10% higher than the beginning of the year in both cases.

Margins and input costs are also impacted by a number of factors other than price and these are the areas where I have focused my efforts since becoming Minister. I established the Beef Round Table forum last year in order to bring all stakeholders together and to facilitate open discussion between industry and farming organisations. At the fifth meeting of the Round Table in January, the stakeholders agreed to a broad range of outcomes which address areas of concern for the sector relating to product specification, price transparency and a weight limit moratorium until December 2015.

The Round Table allows stakeholders to engage in a positive way on strategic goals for the sector. As an example, the most recent meeting of the RoundTable held in February resulted in the establishment of a stakeholder group, led by Teagasc, which was tasked with preparing written guidelines for beef farmers which would act as a blueprint for those currently producing bull beef or those considering developing bull beef production systems, taking into account production efficiency and market dynamics.

The Deputy will also be aware that I have provided a package worth over €70 million for the beef sector in 2015. This includes €52 million for the Beef Data and Genomics Programme (BDGP) which forms part of Ireland’s draft Rural Development Programme, and will involve a budget of some €300m over a six year period. The proposed BDGP is intended to deliver an accelerated improvement in the environmental sustainability of the beef herd through the application of genomics technology. This will help farmers to manage their enterprises in a sustainable way that is cognisant of Ireland’s climate change commitments, while supporting improved quality and traceability in the national suckler herd. It will also place Ireland at the global forefront in the application of genomics technology and cement our reputation as one of the most important and export focussed beef producing nations in the world.

Of course, new market opportunities for both beef and live cattle exports also impact on the eventual returns to farmers. The recent openings of the US and Chinese markets to Irish beef are major achievements in this regard. Given China’s strict safety standards and cautiousness around granting market access and with a market of over 6 million tonnes and growing, it is a clear endorsement of Ireland’s food safety standards and a huge economic boost to the beef sector .

Sheepmeat

2015 is proving to be a good year for sheep producers so far, with average factory prices for the first eleven weeks of the year running at 11% ahead of the corresponding period in 2014. Slaughterings during the same period are down by 2%, reflecting a lower carryover of hoggets from 2014.

While recent currency movements would have an impact on the cost of imported input materials for farmers in general, the problem is not particularly acute for sheep farmers as they are mainly fed on grass.

The vast majority of our sheepmeat is exported to high-value markets in Northern Europe. However it is important to develop alternative market opportunities and I intend to continue to drive this process. My Department in consultation with the meat industry and in cooperation with Bord Bia and the Irish Embassies abroad is constantly pushing for new markets and opportunities. In 2014 we agreed veterinary health certificates with Lebanon, Namibia, Hong Kong and The Philippines allowing for the export of Irish sheepmeat to those countries. Also, during my visit to China leading a Trade Mission in November 2014, I was able to hand over the completed version of a sheep questionnaire which we had been asked to complete in connection with our efforts to gain access to the Chinese market for sheepmeat. This represents the first milestone on the road which will lead, I hope, to Ireland gaining access to the Chinese market for sheepmeat in the future. While in the US recently, we also had the opportunity to raise access for Irish lamb but we were informed that the next step in the process, which is the lifting of their TSE ban, is still sometime away.

Pigmeat

The development of the pigmeat sector is a priority for me given the crucial role which the industry plays in supporting approximately 7,000 jobs including production, slaughter, processing, feed manufacture and services. The sector accounts for 5% of the total agri-food sector and is the third largest individual component. In 2014 export volumes were up 10% continuing the growth seen in previous years, against export values of 3%, somewhat constrained due to price pressures. Pigmeat prices tend to be cyclical in nature with periods of lower prices and production followed by recovery and this has remained the case for many years. Price declines in the latter part of last year resulted in the end of year price falling below levels unseen in the previous three years. However due to recent price gains the average Grade E pig price currently stands at €142.93, 6% lower than the same week last year. I am hopeful that with the recent opening of Aid to Private Storage for the pigmeat sector and seasonal demand, recent price rises will continue and that this will result in improved margins for pig producers.

Support is provided by my Department for the development of the pig sector in a number of ways. Firstly I have included provision in 2015 and throughout the whole RDP for an on-farm capital investments scheme, TAMS II, with an overall budget of €395 million across all sectors, with €37 million allocated for 2015. Among the areas identified for initial funding are investments on pig farms for energy, water meters and medicine dispensers.

Other supports for development of the sector come through Teagasc which, through its Moorepark pig research facility and courses in pig production, plays an important role in improving production at farm level. Through its Joint Research Advisory Programme, Teagasc supports Irish pig producers by providing advice, research and education across a range of issues of importance to the sector. The high level objective of the programme is to enhance the sustainability of Irish pig meat production, including improvements in economic, social and environmental standards. This will result in improvements in the production and marketability of Irish pigmeat.

I am also conscious of the need to promote the consumption of Irish pigmeat in domestic and overseas markets. Bord Bia provides assistance to the pigmeat sector through its marketing and promotional activities, and the pigmeat quality assurance scheme helps to consolidate the position of Irish pigmeat on the domestic market and helps expand its presence on EU and third country markets.

International trade is expected to improve in 2015, reflecting the ongoing increase in demand in response to growing per capita wealth in China, and the redirection of pigmeat usually directed towards the Russian market to different locations such as South Korea and the Philippines. For my part I have undertaken to ensure that as many alternative markets as possible are open to Irish Pigmeat processors. In this regard I was pleased to announce last year the opening of the markets in Vietnam and the Philippines for Irish pigmeat which are already serving as valuable alternative markets to Russia for Irish pigmeat exports. I am also continuing in my efforts to secure new third country markets, which has been a priority of mine since assuming office and my Department will continue to engage with the Russian authorities and with a view to lifting the pigmeat restriction as a priority.

It is important to remember that pigmeat remains the most consumed meat worldwide and this will continue to present opportunities for Irish producers, given our self-sufficiency. In addition, the progress made in the last few years in establishing and consolidating a presence in important international markets will better position Irish producers to take advantage of growing demand.

Poultry

Poultry meat has long been seen as a value for money food and this has underscored an increase in demand, particularly in recent years. The sector has faced considerable challenges in recent years with rising input and energy costs combined with significant pressure from lower cost imports. While input prices reduced somewhat, producer and wholesale prices in the sector eased slightly throughout 2014.

Support is provided by my Department for the development of the poultry sector in a number of ways. Provision is made through the RDP, TAMS II, for poultry investments. In addition knowledge transfer groups will be established to optimise producer productivity and profitability in the poultry sector.

In terms of marketing supports, on a national level Quality Assurance plays a fundamental role in promoting food and horticulture and provides the platform for consumer promotion of product quality. The primary outlet for Irish-produced poultry is the fresh retail trade where Irish product is still dominant. A very important instrument in that market is the Bord Bia Poultry Quality Assurance Scheme (PQAS). The Quality Assurance mark is recognised by consumers as a guarantee of traceability and reliability and is sought after by Irish retailers.

In terms of exports, Ireland exports poultry meat to almost 40 international markets and export values grew by an estimated 20% in 2014 to €310 million, underpinned by strong growth in the export of processed products. Irish production is forecast to remain stable during 2015 as EU and international production is estimated to increase marginally.

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