Update: Return for Cereal Producers – Agriculture 23rd September, 2014

Parliamentary Question No. 257    
   
 
To ask the Minister for Agriculture, Food and the Marine if he has satisfied himself that the return for cereal producers in the current year remain adequate and in line with increased costs; and if he will make a statement on the matter.
– Bernard J. Durkan.
 
 
For WRITTEN answer on Tuesday, 23rd September, 2014.
 
Ref No: 35768/14 Proof: 358
 
 
REPLY
 
The Minister for Agriculture, Food     and the Marine : (Simon Coveney)

The maintenance of an efficient and viable cereals sector in Ireland is clearly very important to the well being of the agri-food industry. Indigenous production of cereals is of course, an important part of primary agriculture production. In addition to generating an income for our tillage farmers, the cereals sector is a key source of grain for the milling and malting industry and feeding stuffs for the livestock sector. Annual cereals production in Ireland has fluctuated around 2 million tonnes in recent years and it is desirable to try and sustain this level of production in order to avoid over dependence on imported cereals.
 
The 2014 harvest is estimated in the region of 2.5 million tonnes, well above the long-term average production of 2 million tonnes. Since Ireland is a deficit market for cereals, prices here are greatly affected by world prices and supplies. This is very much in evidence at the moment as a buoyant European and World cereals harvest continues to exert a downward pressure on prices of native grain. Volatility in prices is likely to become a constant feature of Irish cereal prices in future and grain producers should factor such fluctuations into their planning and marketing strategies.
My Department operates a range of services aimed at improving the efficiency of, quality and viability of cereal production. These services include seed certification, seed testing and recommended list of varieties, research funding through the ‘Stimulus’ programme and funding for the quality assurance scheme. In addition, Teagasc provides research, training and advisory services for cereal producers. The value of all these support services is reflected in the fact that Irish cereals producers have consistently achieved some of the highest yields in the world.
Food Harvest 2020 outlined a number of challenges facing the cereal sector in the coming years including price volatility, climatic and disease issues, high input prices, small and fragmented holdings and the cost of rented land. However, the report also pointed to positive projections for cereal prices as markets are relatively well-balanced and world cereal prices are projected to be higher than in the last decade. It is known that global grain production is struggling to meet the increasing demand for food, feed and industrial uses. In addition to a rising global population creating a bigger demand for cereals, an increasing demand for meat is disproportionately increasing grain demand even further. It is predicted that global demand for cereals will reach 3 billion tonnes by 2025 compared with 2.3 billion tonnes currently.
 
The primary growth in requirement for Irish cereals in the years ahead is likely to be for animal feed, given the targets for increased livestock output proposed in Food Harvest 2020. However, considerable potential also exists in grains for the drink industry such as malting barley and recent significant investments by the large brewing and distilling companies here in Ireland are proof of such potential. Further, it is envisaged that there will be increased demand for Irish oats milled for human food for the home and export markets and in this context, the success of the Agribusiness sector in securing, long-term contracts with US-based Foods companies to supply milled Irish oats to a premium Irish oatmeal brand in the US market, is particularly welcome.