Commissioner Hogan was speaking before the European Parliament’s agriculture committee this Monday as it discussed the findings of the EU’s agricultural markets task force, which aims to give farmers a fairer place in the food chain.

In his introduction to the debate, he welcomed the “fragile recovery” on agricultural markets, adding that the latest milk prices in particular “give cause for optimism”.

We’re going to monitor this to see if action is required

However, Sinn Féin MEP Matt Carthy replied that he saw “no evidence... of any less market volatility in 2017”, especially in light of Brexit and other political international developments”.

This prompted Commissioner Hogan to expand on his initial remark. He said that while sentiment was improving on the dairy and pigmeat markets hit by the latest crisis, beef farmers would come under increasing price pressure, including from the effects of the UK’s decision to leave the EU. “We’re going to monitor this to see if action is required,” he said, stopping short of indicating what action may be taken.

Sterling exchange rate

The latest statements from the UK government have indicated that it may be moving away from the EU single market after Brexit, causing the sterling to fall against the euro again and hitting beef exporters supplying the UK, especially Ireland.

Looking forward to 2017 markets last month, Kepak managing director John Horgan told the Irish Farmers Journal that Irish beef prices would be shaped primarily by key currency exchange, with EU consumer demand and EU regional supply balances also playing a part.

While the export refunds used in the past to subsidise European beef exports are now out of the equation following international agreements, other avenues could be explored. The introduction of the milk production reduction scheme last year illustrated the EU’s ability to design ad-hoc support schemes quickly.

French beef reduction scheme

The French government has already implemented a beef version of the scheme, paying farmers to sell cattle at lower weights in January and February in a bid to reduce the overall volume of meat entering the market. Beef-breed steers slaughtered under 360kg carcase weight or exported live under 680kg liveweight are eligible for a €150/head payment.

This scheme is funded through France’s €50m share of the €350m in European funding made available to member states last September to alleviate the crisis in the livestock sector, matched by an equivalent amount from the French exchequer.

Ireland’s choice was to use its share of the same European envelope to provide the low-cost €150m loan fund due to open for applications shortly.

The ICSA has called for a scheme to reduce cattle output here, suggesting a €200 payment per suckler cow linked to a reduction in the number of calves registered this year compared with 2016.

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Listen: more volume, less value for beef exports in 2016