Dáil Éireann Debate, Tuesday - 6 November 2012
942. Deputy Bernard J. Durkan asked the Minister for Agriculture, Food and the Marine if any enquiries have been made into the reason beef producers here receive a lower price for their product than their colleagues in the UK; if he can suggest any measures to alleviate the problem; and if he will make a statement on the matter. [48718/12]
View answerThe price paid for products in the marketplace is a function of a number of market forces and the negotiation of commercial contracts is essentially a matter for the contracting parties. Returns to beef producers in individual EU markets reflect not only the local supply / demand balance but also overall trading conditions within the internal market and trade flows to third countries. Buoyant European cattle prices in 2011 and 2012 are attributable to a supply deficit throughout the EU and to strong global demand. In fact, Irish cattle prices have exceeded the EU average level for most of the year to date, with the Irish price for the benchmark grade only dipping below the EU producer price in August when countries such as Germany and Italy experienced supply shortfalls which had the effect of driving up prices substantially in those markets.
Trade with the UK is impacted by fluctuations in the euro/sterling exchange rate and the extent of Britain’s import requirement which is forecast to increase in the short run consequent on a continuing decline in domestic beef production. With consumption expected to remain stable and a continuing reduction in the size of national cattle herd, British beef imports are predicted to grow from 381,000 tonnes in 2011 to 417,000 tonnes in 2013.
A number of factors have been identified to account for the differential between Irish and UK cattle prices. These include a British consumer preference for indigenous beef product. In any analysis of comparative prices, it must also be recognised that UK cattle prices are currently among the highest in the EU. Moreover, a price differential makes Irish beef products competitive in the UK market such that Ireland supplies the bulk of the UK’s import demand, notwithstanding additional logistical and processing costs incurred in shipping to that market. When comparing Irish and UK cattle prices, it should be noted too that there is a significant exchange rate effect making the current UK price for a particular grade appear even higher compared to a year ago.
In the longer term, the industry aims to maximise returns for Irish beef through its repositioning and differentiation strategy that focuses on the key attributes of Irish beef: environmentally sustainable, grass-based production systems, full traceability, Quality-Assurance at all stages and superior eating quality.
In the meantime, my Department and its agencies will continue to support the sector through its efforts to open new markets for Irish beef and to ease the import conditions in markets that are already open. These efforts have yielded a number of positive results in countries such as South Africa, Tunisia, Russia, UAE, Singapore and Egypt over the past year or so.
In this context, you will also be aware that market access for beef was the focus of my visits earlier this year to China and the USA and that my Department is proactively engaged with a range of third countries in an ongoing effort to secure and expand market access. My Department will prioritise international market access for both beef and live animals.
I can also assure you that my Department will continue to facilitate live exports which have a dual function in stimulating cattle price competition and serving a real market demand. In this context, both the Libyan and Lebanese markets have recently been opened for live cattle from Ireland. In the case of Libya, my Department is working closely with the relevant veterinary authorities to increase the age limit from 24 months to 30 months. The Lebanese market is open for fattening and slaughter cattle and for breeding cattle under 36 months of age. The Egyptian market is also open for fattening cattle under 20 months and to slaughter cattle under 30 months. The resumption of trade with these countries will depend on commercial factors and the availability of suitable transport options.
