Written Answers - Market Trends.
Phil Hogan
Question:
142
Mr. Hogan
asked the
Minister for Agriculture, Food and Rural Development
the market trends in respect of each agriculture commodity produced by farmers in respect of the second half of 2001 with specific reference to the estimated processing price paid to farmers in each case; and if he will make a statement on the matter.
[14143/01]
It is not possible to generally forecast price developments with any degree of accuracy because of the considerable number of variables involved – markets, price supports, levels of export refunds etc.
The following is the position regarding specific commodities: The market situation in the beef sector in Ireland in the second half of the year will be substantially dependent on the availability of third country markets and the market supports operated by the European Commission. Virtually all third country markets are closed at present to Irish cattle and beef and, in the months ahead, I will be using all of the diplomatic resources available to me to secure their re-opening. Egypt is of particular importance in view of the size of that market for Irish beef. Senior officials of my Department have recently visited Egypt to brief their counterparts on the range of controls that have been put in place to deal with BSE and foot and mouth disease both at EU and national level. Follow-up action is being taken by my Depart ment in conjunction with the Department of Foreign Affairs and Bord Bia.
As far as market supports are concerned, the purchase for destruction scheme will be replaced, from 1 July, by a special purchase scheme which will not apply to steers. In this situation, the steer and beef market will be supported through intervention and export refunds. I will be seeking to have these supports operate at a level that will ensure a satisfactory return to our producers. As far as price developments in the second half of the year are concerned, beef intervention prices are due to be reduced by 6.7% from 1 July under the Agenda 2000 agreement. However, premiums have been increased substantially to compensate producers for this reduction in prices. These premiums will be worth an additional £175 million or 20p/lb. to Irish producers this year compared to 1999.
Sheep prices in Ireland so far this year are on average, approximately 25% higher than in 2000 largely because of the export ban imposed on sheep and sheepmeat from the United Kingdom as a result of the foot and mouth disease situation there. In view of the very substantial number of sheep which have been slaughtered in the UK because of FMD and the likelihood that the export ban on sheep and sheepmeat from the UK is likely to remain in place until the end of this year, the prospects are for sheep prices to remain well above last year's levels for the remainder of the year.
Dairy markets have remained stable during the first five months of this year. Going forward there may be some pressure on the market as peak output during April to September seeks outlets in third country markets and within the EU. Given these uncertainties it is not possible to predict producer prices for the latter half of the year at this stage. The outlook, however, is generally favourable and I am confident that Irish exporters will continue to maintain existing markets and seek new market opportunities for the remainder of the year.
As regards sugar, the COM in the sugar sector is currently under review, however, it is expected that about 1.38 million tonnes of contracted sugar beet will be produced in 2001 i.e. sufficient to manufacture the national sugar quota. The price paid for sugar beet is as specified in EU regulations for standard quality beet with specified sugar content. The price can be adjusted to take account of sugar content above or below the standard. Any additional payment is a matter for negotiation between the growers and the sugar manufacturer.
The EU price forecasting group has predicted a price of £125 per 100 kgs – grade E pig carcases – for Ireland for the third quarter of 2001 and £128 for the fourth quarter. These prices represent increases of about 18% on the same period in 2000. It should be borne in mind, however, that these estimates do not take into account the effects of measures and market forces arising from foot and mouth disease and BSE. The possible impact of these effects is as yet unknown and may result in deviation of actual prices from these estimates.
In so far as it is possible to predict, poultry and egg prices are expected to remain at around current prices for the remainder of the year. The price of meat imported from third countries is of course an important influence on poultry meat prices in the EU. China will be eligible to join the list of third countries exporting to the EU in the second half of the year and the consequences for price levels remain to be seen.
There is no common organisation of the market in potatoes, nor, any form of intervention mechanisms such as market withdrawals, production quotas or export support. The sector is consequently dominated by market forces which can lead to large fluctuations in producer prices from year to year, affected directly by production levels and prices prevailing elsewhere in the EU. Under these circumstances, it is impossible at this time to predict potato prices for the latter half of 2001.
It is not possible at this stage to estimate the market trends for cereals in the second half of 2001. This will depend on the harvest in this country and other EU member states. The intervention price for cereals in 2001, resulting from CAP reform negotiations under Agenda 2000, was reduced by 7.5% and the price for the 2001/2002 marketing year will be £79.79-101.31 per tonne.
