Dáil Éireann Debate, Tuesday - 11 February 2014
499. Deputy Timmy Dooley asked the Minister for Agriculture, Food and the Marine the actions he has taken to close the very large and unacceptable beef price gap between Irish cattle prices and cattle prices in our largest export market, Great Britain, which is now in the order of 80 cent per kilogram or more than €300 per animal; and if he will make a statement on the matter. [6473/14]
View answerWhile my Department has a role in monitoring and reporting on cattle prices I have no function in relation to commercial transactions between meat factories and their suppliers. Rather this is the responsibility of the industry – processors and farmers working together – to manage the type and volume of cattle brought to market so that the supply chain operates for the benefit of both parties.
I am not therefore in a position to influence the price paid for cattle either in Ireland or indeed the United Kingdom, particularly in a trade that is cyclical in nature and prone to short-term price fluctuations. Furthermore, successive reforms of the Common Agricultural Policy have involved a shift to more market-oriented policies that move away from price supports and towards direct payments to farmers.
The UK is approximately 80% self sufficient in its beef requirements and is, by a significant margin, the main market of Irish beef accounting for around 50% of exports in volume terms. 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. The strong UK cattle prices reflect a fundamentally tight supply situation. The total number of prime cattle slaughtered at UK abattoirs during 2013 fell 2% on the year to 1.93 million head leaving the UK prime cattle kill for the whole year at its lowest point since at least 1970 when records began. However, with the UK cattle herd at its lowest point since 1948, it is likely that these slaughter levels are the lowest in approximately 65 years.
A number of factors have also 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.
It is correct to say that Irish beef exports into the UK tend to command a lower value per kilogram than domestic British beef but it is equally true that the prices achieved there would be well ahead of equivalent beef prices across most of the Continental EU markets where finished cattle prices are much lower. For example, Irish cattle prices remained ahead of EU levels in 2013 averaging around 106% of EU R3 male cattle prices. It is expected that the Irish beef sector will be well placed to maintain this momentum in 2014 despite some further increase in supplies.
