The price of store cattle is generally a function of market forces – supply and demand. This is particularly so with regard to the price of finished cattle. Since the beginning of this year, store cattle prices have improved considerably. Although still down on this time last year, the trend has been in the right direction and there is some movement towards paying better differentials for quality cattle. Factory quotations for U type steers are within 2p per lb of last year's levels whereas Friesian type steers are back by 4p per lb. Poorer grass growth in spring in conjunction with the fodder scarcity carried over from last year and the lower prices for finished cattle has impacted on the demand for store animals.
While cattle prices have improved generally since the beginning of the year and reflect the continuing recovery of export markets, the process takes time. The collapse of the Russian market in particular has impacted on third country sales. EU markets continue to improve but the continuing preference on those markets for beef of domestic origin is delaying a more rapid recovery. The buoyancy of the live trade to EU markets is, however, having a major positive impact on weanling prices and I am hopeful that this trade, in conjunction with a general improvement in the beef trade, will impact on the prices of all cattle categories, including stores, over the coming months.
With regard to Libya, agreement was reached with a Libyan Government delegation last July providing for the reopening of the Libyan market for Irish cattle and beef on the basis of agreed veterinary health conditions and terms of contracts. This agreement was the culmination of extensive contacts with the Libyan authorities since early 1997. The Libyan Government, through the General People's Committee, formally cleared the agreement before the end of September and written confirmation to this effect was received.
Although the Libyan authorities indicated their wish to have the agreement implemented immediately, there have been delays in the conclusion of contracts for Irish cattle. These delays are of serious concern both to myself and the Government. Ongoing contact is being maintained with the Libyan authorities, through every appropriate channel, with a view to ensuring that the July agreement is implemented in practice. The Libyan authorities have indicated, as recently as 1 May, that current economic conditions in Libya have resulted in the postponement of the implementation of the agreement but pointed out that they have never failed in the past to honour any agreement reached with another state. I am hopeful, therefore, that the agreement will be honoured and I will continue to take every appropriate step to ensure this outcome.
The only other traditional market for live cattle is Egypt and while it is my objective that all markets should be open to Irish cattle, it should be noted that the nature of that market has changed for Ireland. Egypt has now become the largest market for Irish beef, importing 120,000 tonnes of beef in 1998, which is the equivalent of over 350,000 head of cattle.