Dáil Éireann Debate, Thursday - 14 May 2015
111. Deputy Bernard J. Durkan asked the Minister for Agriculture, Food and the Marine the degree to which his Department continues to monitor the future prospects for the beef, sheep, lamb, poultry, and fish sectors, in the context of global market trends; and if he will make a statement on the matter. [19136/15]
View answer120. Deputy Bernard J. Durkan asked the Minister for Agriculture, Food and the Marine the extent to which his Department continues to monitor the margins available to producers in the pig, beef, lamb, poultry, diary, and fish sectors, with a view to ensuring a stable industry, and maximising opportunities for producers; and if he will make a statement on the matter. [19145/15]
View answerI propose to take Questions Nos. 111 and 120 together.
BEEF
I am pleased to note that prices at the end of last week have increased 15% since last September and are now 8% higher than in the same point in 2014. Current beef prices in Ireland stand at 106% of the EU15 average. As of the end of last week, the average prices paid (excluding VAT) for an R3 steer stood at €4.08/kg and an R3 Heifer at €4.21.
Margins and input costs are also impacted by a number of factors other than price and these are the areas where I have focused my efforts since becoming Minister. I established the Beef RoundTable forum last year in order to bring all stakeholders together and to facilitate open discussion between industry and farming organisations. At the fourth meeting of the RoundTable in November, the stakeholders agreed to a broad range of outcomes which address areas of concern for the sector relating to product specification, price transparency and a weight limit moratorium until December 2015.
The RoundTable allows stakeholders to engage in a positive way on strategic goals for the sector. As an example, the most recent meeting of the RoundTable held in February resulted in the establishment of a stakeholder group, led by Teagasc, which was tasked with preparing written guidelines for beef farmers which would act as a blueprint for those currently producing bull beef or those considering developing bull beef production systems, taking into account production efficiency and market dynamics.
The Deputy will also be aware that I have provided a package worth over €70 million for the beef sector in 2015. This includes €52 million for the Beef Data and Genomics Programme (BDGP) which forms part of Ireland’s draft Rural Development Programme, and will involve a budget of some €300m over a six year period. The proposed BDGP is intended to deliver an accelerated improvement in the environmental sustainability of the beef herd through the application of genomics technology. This will help farmers to manage their enterprises in a sustainable way that is cognisant of Ireland’s climate change commitments, while supporting improved quality in the national suckler herd. It will also place Ireland at the global forefront in the application of genomics technology and cement our reputation as one of the most important and export focused beef producing nations in the world.
Of course, new market opportunities for both beef and live cattle exports also impact on the eventual returns to farmers. The recent openings of the US market to Irish beef and the lifting of the beef ban in China are major achievements in this regard.
Sheepmeat
The industry-wide strategy for developing the sheep industry in Ireland was set out in the Food Harvest 2020 document which envisages a 20% increase in the value of output by 2020. My approach to building on the significant achievements of the strategy up until now is to drive the development of the industry at home and increase Ireland's market share of the world market. This will ensure that producers and processors can plan for the future, increasing the value of the industry for the benefit of all.
In terms of the performance of the sector in 2014, Irish sheep throughput at DAFM-approved plants was up slightly on 2013, with a marginal increase of 1%. To date in 2015, throughput at DAFM approved plants is almost at the same level as this time last year, with an approximate increase of 9 % in the average national price for 2015 year to date over 2014.
At producer level I continue to put in place incentives to ensure that producers see a viable future in the sector. Under the new Rural Development Programme (RDP) I have made provision for improving efficiency and profitability in sheep production under the Knowledge Transfer measure which has a budget of €100m. The experience in the Sheep Technology and Adoption Programme (STAP) has informed the development of this measure. In addition to profitability, the emphasis will be on the key issues of business skills, environmental sustainability and herd health, with increased interaction between individual farmers and advisors in order to customise information exchange. The Knowledge Transfer Programme for the sheep sector will be launched in 2016 when the current STAP concludes. The proposed new agri-environment scheme, GLAS (Green Low-carbon Agri-environment Scheme) will also support, amongst others, extensive and hill farmers, who have shown themselves to be careful custodians of the countryside in previous agri-environment schemes. It includes a menu of environmental actions, many of which will be suitable for sheep farmers.
On the export front I intend to drive further the search for new markets. My Department in consultation with the meat industry and in cooperation with Bord Bia and the Irish Embassies abroad is constantly pushing for new markets and opportunities. During 2014, we have agreed veterinary health certificates with Lebanon, Namibia, Hong Kong and The Philippines thus allowing for the export of Irish sheepmeat to those countries. Also, during my Trade Mission to China in November 2014, I was able to hand over the completed version of a sheep questionnaire which is a key step in gaining access to the Chinese market for sheepmeat. This represents the first milestone on the road which will lead, I hope, to Ireland gaining access to the Chinese market for sheepmeat in the future.
PIGMEAT
Pigmeat prices tend to be cyclical in nature with periods of lower prices and production followed by recovery. My Department carefully monitors developments in the pig sector, both domestically and internationally. Prices at the end of last week have increased to €147.49, now 8.7% higher than when prices reached a three-year low of €135.62 in January of this year. I called on the European Commission earlier this year to monitor developments on markets and where necessary, to quickly activate safety net provisions such as public interventions and/or private storage aid. This resulted in the introduction of the Aids to Private Storage scheme for the pigmeat sector which opened in early March of this year. However, due to the fact that EU pigmeat market prices stabilised somewhat over recent weeks and the uptake of the scheme by operators dropped to minimal volumes, the Commission closed the scheme as of this month.
In relation to the Russian ban on EU pigmeat exports, I am fully aware of the concerns Irish pig farmers have as a result of the closure of this market. My Department has met with the Russian authorities on a number of occasions to impress upon them the importance we attach to the normalisation of trade with Russia. Ultimately however, the Russian ban on pigmeat is an EU wide issue and is likely only to be resolved at EU level. The Commission has referred this matter to the WTO for resolution.
Support is provided by my Department for the pig sector in a number of ways. Firstly, I have included provision in the Rural Development Programme for an on-farm capital investment scheme, TAMS II, with an overall budget of €395 million across all sectors. Some €37 million has been allocated for 2015. Amongst the areas identified for initial funding are investments on pig farms for energy, water meters and medicine dispensers. Other elements of the RDP, such as a targeted on-farm animal health and welfare scheme will also be of benefit to the pig sector.
Other supports for the sector come through Teagasc which, through its Moorepark pig research facility and courses in pig production, plays an important role in improving production at farm level. I am also conscious of the need to promote the consumption of Irish pigmeat in domestic and overseas markets. Bord Bia provides assistance to the pigmeat sector through its marketing and promotional activities, and the pigmeat quality assurance scheme helps to consolidate the position of Irish pigmeat on the domestic market and to expand its presence on EU and third country markets.
For my part I have undertaken to ensure that as many alternative markets as possible are open to Irish Pigmeat processors since the closure of the Russian market last year. In this regard I was pleased to announce the opening of the markets in Vietnam and the Philippines for Irish pigmeat which will serve as valuable alternative markets to Russia for Irish pigmeat exports. My Department continues in its efforts to develop access to international markets.
POULTRY
Poultry meat has long been seen as a value for money food and this has underscored an increase in demand, particularly in recent years. Margins and input costs are impacted by a number of factors other than price and while the price of compound feed and cereals eased somewhat during 2014, they still compose a significant cost for producers. This together with energy costs and significant pressure from imports has presented difficulties for producers. Support is provided by my Department for the pig sector in a number of ways. Firstly, I have included provision in the Rural Development Programme for an on-farm capital investment scheme, TAMS II, with an overall budget of €395 million across all sectors. Some €37 million has been allocated for 2015. Amongst the areas identified for initial funding are investments on poultry farms for energy, water meters and medicine dispensers. Other elements of the RDP, such as a targeted on-farm animal health and welfare scheme will also be of benefit to the poultry sector.
While input prices reduced somewhat last year, producer and wholesale prices in the sector eased slightly throughout 2014. Poultry is normally reared under contract to processors, for a pre-agreed price, and therefore poultry producers are not subject to the same price fluctuations as other farmers. EU broiler prices decreased slightly during 2014 but there was a small recovery towards the end of the year.
The value of Irish poultrymeat exports in 2014 is estimated to have reversed the trend evident in recent years and grown by around 20%, helped by stronger processed poultry exports. The value of exports increased to an estimated €310 million, underpinned by strong growth in the export of processed products. For my part I have undertaken to ensure that as many alternative markets as possible are open to Irish poultry processors and my Department continues in its efforts to develop access to developing international markets.
Fish
There is a strong demand for fish globally and there will be export opportunities created by a requirement for an extra 40 million tonnes of seafood globally due to world population growth by 2030. Seafood is increasingly being recognised as a natural valuable, cost effective source of protein for a growing global population. In 2014 the value of seafood exports from Ireland was €519 million.
As well as the seafood export opportunities in the 28 EU Member States there are many existing seafood trade agreements with 3rd countries including US, Canada. Ireland also has Memoranda of Understanding with China, Japan and the Russian Federation. A strong performance and attendance by Irish seafood companies at April 2015 Seafood Expo in Brussels highlighted Irish seafood as a world recognised quality-led brand.
DAIRY
Raw milk prices in Ireland currently average in the region of 31 cents per litre. Using cross country comparable data from the EU Milk Market Observatory the most recently available data show that the price in Ireland is approximately one-fifth below the same month in 2014 which is consistent with EU average price movements in the same period. These price developments have been evident throughout 2014 and into 2015 and are broadly attributable to global supply and demand factors which have also been exacerbated by the Russian ban on agri-food produce from the EU and elsewhere.
The suggestion, towards end 2014 and based on analysis by various domestic commentators was that prices in Ireland could fall to the mid-twenties per litre during 2015 but this has not materialised. Co-operatives have also played a role in maintaining relative price stability. In common with other sectors, a greater focus has developed in more recent years on margin than a simple examination of price. In this respect ongoing efforts in the sector to drive efficiency at farm level will continue with a view to increasing margins.
The milk quota regime ended on March 31st. The abolition of milk quota presents a massive opportunity for the Irish dairy sector and one which we should look forward to with confidence. The consensus amongst market analysts is very clearly that medium-term prospects for global dairy markets are good, with growth in world population and wealth expected to stimulate strong levels of demand for dairy products. My aim is to help position the Irish dairy sector to be able to take advantage of this opportunity.
