Dáil Éireann Debate, Thursday - 14 May 2015
8. Deputy Seán Kyne asked the Minister for Agriculture, Food and the Marine based on 2015 birth rates on dairy and suckler farms, the outlook for the beef market in the next two years; if a veal market needs to be further developed, in view of the expected increase in births in the dairy herd; and if he will make a statement on the matter. [18673/15]
View answerThis question relates to 2015 birth rates in the dairy and suckler herds and what the implications will be for the market in the next two years and whether the Minister sees any role for veal exports, in particular red veal, the production of which is regarded as being more humane,
I thank the Deputy for raising this question.
The forecasted increase in the size of the dairy herd will, undoubtedly, have an impact on the beef sector and, specifically, the number and type of animals entering the supply chain. Dairy breed animals will require different farm management systems and would typically not achieve the same conformation scores as animals from the suckler herd. This will be reflected in the price achievable for finished product and farmers deciding to fatten these animals for slaughter should take account of all of these factors when making their production decisions. Most farmers will understand this.
According to the data available on my Department’s animal identification and movements database, the number of calf births registered so far this year has increased by about 130,000 or 9% compared to 2014. The number of calves registered in the dairy herd is just over 100,000 higher than last year. It is a significant change. The suckler herd is also showing an increased number of births, with about 30,000 more calves registered to date in 2015. It is a positive story in the suckler sector which it is important to recognise. The increase follows two years of declining numbers in the suckler herd and while the outturn for the rest of the year remains to be seen, the figures reflect the return of some confidence to the sector in recent months. The increased output across both production systems should be seen as a positive development and the challenge for all of the sector is to deliver a solid return on the animals through continued market development and adding value to our beef output.
Traditionally, male dairy breed calves have been prime candidates for live export to continental markets and my Department has facilitated this trade to ensure it provides an alternative market outlet for Irish farmers. The veal market is important for a growing dairy sector. Advances in sexed semen technology may ultimately have an impact on the production of beef from the dairy herd and we must continue to endeavour to maximise this element of beef output.
It is interesting to see an increase of 130,000 in the number of calf births this year in both the beef and dairy sectors. That will have consequences for the market which, as the Minister is well aware, is a cyclical one. Much concern was evident in that regard in 2014. Given the figures, one would expect concerns to arise in the future also. That is the reason for the question on veal. I accept that the new beef data and genomics programme which the Minister launched this month has had a positive and stimulating effect on the beef sector. It was well flagged that such a package would be put in place. Does the Minister believe there is an export market for red or rose veal? Live exports are very important to the country. We do not want to develop a sector that will be in competition with prime beef from the suckler herd. Is there an opportunity to explore an export market for the red veal sector?
While we must look at every opportunity to add value to our beef production, I am not convinced that targeting large-scale veal production would be the best use of our resources. Irish steer and heifer beef is recognised all over the world for its excellent quality and green credentials and we need to concentrate on leveraging this position even further and increasing the efficiency of our production systems, whether from the suckler or dairy herd. We think we can put production systems in place that will allow us to add value, grow the animals here and produce more beef, but, obviously, that means we will need more markets and competition to ensure a price drop will not ensue, which is what happened last year. To date this year, on average, the price is up by approximately 10% on last year. It is 14% and 15% higher than at the low point last year. Farmers are concerned that once we go above a certain number in terms of production, there is arguably overproduction, which drives prices down. The challenge for me and the industry is to develop new markets, including in the United States, China, Japan, other parts of Europe and North Africa in order that we will have enough competition to ensure we can grow volume, as well as maintain strong value. I am pleased to state that so far this year we are at 107% of the EU 15 price for beef, which means that we are in the premium space. We are getting more money for farmers for Irish beef than most farmers in Europe are getting, which is good news.
I accept the Minister's position. Obviously, adding value within the country is what we should be doing. Farmers want a fair price for the work and investment they put into their business. The live trade is equally important in terms of the competition it provides. Is the Minister confident that, for example, the work he has done in the US market will sustain prices in the years ahead, notwithstanding the increase in the number of calf births?
In case I am being misunderstood, live cattle exports are really important and calf exports are part of that story, too. Work has been ongoing at an industry level to ensure we have the connections and the routes to markets that we need through France to access the market for calves. That work is active and will continue to be so. However, our strategic thinking as a country, where possible, should be concerned with growing animals in Ireland. That is where the jobs are and the value is added. In that way we will build a bigger industry. We must always maintain a certain amount of live exports to keep the home market honest, if one likes, in terms of what the factories pay for animals. We will pursue both aspects. We will facilitate live exports, but we will also try to put the case together to ensure farmers can also make money in growing, finishing and slaughtering animals in Ireland in order that we build the biggest business we can.
