Dáil Éireann Debate, Thursday - 2 February 2017
287. Deputy Bernard J. Durkan asked the Minister for Agriculture, Food and the Marine the extent to which prospects and prices to the producer in the beef, dairy, lamb, pig meat and poultry sectors remain positive; and if he will make a statement on the matter. [5157/17]
View answerThere are a number of challenges facing all sectors of Irish agriculture in 2017. The immediate impact of Brexit was seen in increased volatility in currency exchange rates which impact on our biggest market for the export of our food and drink and wider political developments throughout the world may impact on Irish agriculture during the year also. However one of my priorities now, particularly in the context of Brexit, is to further increase the market opportunity for Irish food and drink internationally. We are after all an exporting nation with 90% of our food produce leaving the island. It is for this reason I led a major trade mission to four Asian Countries in September and one to Algeria and Morocco at the beginning of November. I will also be leading a trade mission to the Middle East at the end of February. It is only through further increasing our footprint internationally that we will help to mitigate the effects of Brexit and develop our agri-food sector to realise its full potential.
My Department and state agencies such as Bord Bia will continue to work to ensure that as many markets as possible are opened for Irish produce to provide sufficient outlets for exports of Irish beef, lamb, pig and dairy exports. I allocated additional funding to Bord Bia in Budget 2017 for the specific purpose of dealing with the impact of Brexit which help to support Irish food and drink exports in 2017. This, in addition to the opening of a new office by Bord Bia in Singapore this year, will ensure that exports of Irish beef are promoted effectively to provide viable export markets for any increases in Irish beef production.
Beef
I am very aware that following a positive start to 2016, beef farmers faced a number of challenges as the year progressed. However it should be noted that after an initial difficult period post the Brexit referendum that prices for R3 steers have been increasing since the first week in November and now stand at €3.71c/kg, up 18 cents or 5% from €3.53c/kg.
Turning to the prospects for 2017 it is clear from analysis undertaken by a number of bodies including Teagasc, Bord Bia and my Department that there will be a number of challenges specific to the beef sector in 2017.
One of the key elements in coping with these challenges is ensuring that there is a market for Irish beef. There is a strong demand for meat globally including beef and figures from the European Commission's most recent Short Term Outlook for meat markets show a projected growth of per capita beef consumption of 2.1% for 2016. Whilst we exported approximately 97% of our beef exports in 2016 to EU (including the UK), I am very conscious of the importance of growing international markets as a valuable outlet for any increased Irish beef production. Indeed this is a crucial component of the Food Wise 2025 strategy. Very significant progress has been made in this context in recent years and my Department is currently in the process of attempting to secure beef access to a range of Third Countries including China, South Korea, Ukraine, Thailand and Vietnam. This builds on the opening of some major markets in the last two years including the US, Canada and Japan. This is a vital means of providing Ireland’s beef sector with as many commercial opportunities as possible for Irish beef in addition to our existing European markets.
I am also very conscious of the vital role that live exports play in providing an alternative market outlet for Irish farmers. The opening of the Turkish market for live cattle exports has seen over 19,500 exported in 2016, a number I am hopeful will grow in 2017. I also note that exports of live cattle to Libya have recommenced which is a positive and welcome development. My Department is also currently actively examining the possibilities of bilateral health certificates for the export of cattle to Kazakhstan, Montenegro and for breeding cattle to Morocco. I remain actively committed to ensuring that Irish beef producers have the option of exporting to as many markets as possible.
I will also be launching in 2017 a scheme for the funding of facilitators for Producer Organisations in the beef sector. This is a vital step in ensuring the primary beef producers who wish to come together to form a Producer Organisation can engage collectively with processors on the negotiation of the sale of finished cattle for slaughter.
Dairy
More recent price trends in the dairy sector have given tentative signs of green shoots in the global, EU and Irish dairy market. This has also filtered through to farmgate prices throughout the EU and Ireland.
Maintenance of this forward momentum as we approach Ireland’s flush period is important for Irish farmers, who as low-cost producers of the highest quality production, can be confident of benefitting early from any continued upswing in the market.
More recently the process of tendering for release of SMP intervention product back onto the market has commenced, with three tendering rounds, one in December and two in January. On both occasions the Commission have adopted a cautious approach, with only 40 tonnes released thus far. I welcome this approach with a view to continued market stabilisation.
The recently released Bord Bia Export performance review indicates that a rise of 5% in Irish milk output and a recovery in international demand as the year progressed combined to leave the value of Irish dairy and ingredient exports for 2016 around 2% higher that 2015 at €3.38 billion. This is a strong performance given the extremely difficult background context that prevailed.
In general the outlook for the dairy sector must remain cautiously optimistic, with the resolve to engage in measures to mitigate volatility should it re-emerge.
Sheep
On the sheep sector, I am also aware profitability at farm level remains a challenge for all sheep farmers. My Department already has in place a number of schemes, including the BPS, GLAS, ANC and TAMS which make vital contributions to ensuring the continuing viability of sheep farming. The sheep sector is a valuable part of Ireland's agri-food industry and contributed €240 million in exports in 2016 according to Bord Bia.
The Programme for Government committed to the introduction of a scheme for sheep farmers under the Rural Development Programme with a budget of some €25 million provided in Budget 2017. This new Animal Welfare scheme for sheep, in addition to the existing supports available to sheep farmers, will make a vital contribution to ensuring the continuing viability and sustainability of the sheep sector in Ireland.
In designing the scheme, I am aware of the different challenges facing sheep farmers in which different areas of sheep farming are carried out in Ireland. I believe that this scheme will provide a lasting benefit to sheep farming and demonstrates and acknowledges the contribution sheep farming makes to the Agri-food sector in this country.
Pigs and Poultry
The outlook for the pig sector is currently optimistic. Irish pigmeat exports in 2016 increased by 2% in volume while average pig prices were almost 2% higher. This left the value of Irish pigmeat exports up by 4% in 2016 at an estimated €615 million. Net production also increased last year, helped by a significant demand for exports, particularly in China, with volumes up an estimated 44% at 65,000 tonnes reflecting strengthening demand for product in this market. Increased export volumes to International markets, particularly Asia, offset lower shipments to the UK, which showed some decline due to unfavourable exchange rate movement post Brexit.
China is the second largest market for Irish pigmeat exports after the UK, accounting for almost 30% of total exports. Ireland already enjoys pigmeat access to some important international outlets including Hong Kong, China, South Korea, Vietnam, Australia, South Africa and the United States and we are continually seeking to gain access to additional outlets for the pigmeat sector.
Any growth in Irish production in 2017 is expected to be modest. Assuming all other factors are unchanged, export availability in 2017 is forecast to be maintained at 2016 levels. However, much will depend on Chinese domestic production, competition from global exporters and exchange rate fluctuations. A prolonged period of uncertainty around Brexit will continue to determine the competitiveness of Irish pigmeat product in the UK, in particular for secondary processing companies. Domestically, consumption on the home market has benefitted from some improvement in the economy as consumers are purchasing pork more frequently. Bord Bia continues to support the sector and will roll out promotional activity via a new advertising campaign later this year.
Poultry
On the back of increasing demand for poultry protein, the outlook for the sector is relatively positive for this year. Indeed poultry production hit record levels during 2016, up 14% on 2015, driven by consumer demand mostly attributable to chicken. Irish imports declined by over 7% last year, largely due to reduced fresh and frozen imports from the UK and other EU markets, however exports decreased driven by lower volumes of processed poultry. While no significant change is expected in Irish poultry production in the short term, growth in production may be impacted by outbreaks of avian influenza, as it spreads throughout Europe. In this very competitive sector where Ireland is over 100% self-sufficient it is important to have the edge and Bord Bia’s Quality Assurance Scheme provides this on the shelves. Bord Bia estimates that over 90% of poultry meat produced and 95% of eggs consumed on the island of Ireland is quality assured and the inherent added value this gives to the product does not escape the consumer.
I am confident that notwithstanding the current challenges for the above sectors the prospects for these sectors remain positive and I am determined to take any necessary measures to ensure this remains the case.
