I propose to take Questions Nos. 186 and 187 together.
My Department collates the prices paid for domestic cattle on a weekly basis and reports this data to the European Commission in accordance with Commission Regulation (EC) No. 1249/2008 and Commission Implementing Regulation (EU) No. 148/2014. To ensure price transparency, results for Members States are published on the DG Agriculture & Rural Development website. The published weekly data includes market prices for carcasses and live animals as well as information on production and herd inventories. This publicly accessible information allows stakeholders to monitor the evolution of the market situation in each Member State.
The inherent nature of cattle farming with its long production cycle makes it difficult to control and predict beef supplies and prices. In Ireland, these inherent characteristics are further complicated by the influence of export trading conditions and underline the need for the timely communication of market intelligence between the various actors operating in the supply chain. The recent roundtable discussions with representatives of all stakeholders in the beef sector, that I convened and chaired before Easter, were designed to facilitate such a process. It is my intention to hold these roundtable discussions on a quarterly basis.
The primary determinant of prices in any market is the relationship between supply and demand. Price variations in different EU beef markets reflect prevailing internal and external factors. With regard to the price differential between Irish and UK cattle, a number of factors have been identified to explain why Irish-born cattle command lower prices than their British equivalents. These include a British consumer preference for indigenous product as well as additional transport and processing costs in supplying that market. Ireland’s trade with Britain accounts for 53% of our beef export volumes, worth €1.1 billion and, at around 250,000 tonnes in 2013, is equivalent to 750,000 cattle with a high level of penetration in the multiple retail sector.
Supply and demand developments on the key export markets for Irish beef in 2014 will determine the cattle prices for Irish beef farmers. In the short run, the outlook for finished cattle supplies and for beef supply are determined by the current inventories of animals aged 1-2 years. Inventories of these animals in Ireland and the EU are higher than in 2012, indicating that the EU and Irish beef production will be higher in 2014 that in 2013. Given the short-term increase in beef production, the outlook for EU finished cattle prices depends on the prospects for demand in the EU. All other things being equal, an increase in supply would be associated with some decline in prices. The extent to which this outcome is avoided in 2014 will depend on whether European demand for beef grows and the magnitude of that growth relative to forecast growth in supply.
Beef prices are a barometer of supply and demand but what is critical to farmers is the margin at which they produce their animals. For example, better grass utilisation and better breeding decisions by producers will improve the output of their production systems. The ongoing work of Teagasc and ICBF is critical to addressing the challenges of improving efficiency, environmental sustainability and technology adoption in the suckler beef sector. In this regard, significant Government investment, which is worth up to €40m to farmers in 2014, is designed to improve market returns for primary production. Targeted supports such as, the Beef Genomic Schemes and the Beef Data Programme, Knowledge Transfer initiatives, together with the measures announced under the new RPD will enable beef producers to improve the physical and financial performance of their enterprises.
