Pig industry squeals at high feed costs

By Ahmed ElAmin

- Last updated on GMT

Related tags: Meat, Livestock, Uk

Hikes in feed prices are pushing up the cost of meat
supplies, and farmer associations and processors are calling
on retailers to pass on the increased input costs.

"The pig industry is facing meltdown with feed prices doubling yet only a modest increase in the retail price could pull the industry back from the brink,"​ the BPEX stated. Britain's pig farmers launched a campaign earlier this month to persuade supermarkets to increase the prices they pay following a 30 per cent increase in production costs due to worldwide rises in feed prices. Farmers are currently paid £1.10 per kilo for pigs that cost £1.44 per kilo to produce, the BPEX claims. Without a price increase farmers stand to lose approximately £200 million in the next year alone and many face going out of business. "We are asking for modest increases of a few pence on a pack of pork, bacon, ham and sausages,"​ said Stewart Houston, BPEX and the National Pig Association's chairman. In the UK the rise has pushed the UK pork sector to survey consumers on how they would react to a rise in the cost of their meat. About 78 per cent of those polled who buy pig or poultry products said that they would be prepared to pay a few pence extra to cover rising production costs and support British farmers, according to a survey commissioned by the British Pig Executive (BPEX). Of those willing to fork out more for pork, 42 per cent said they would be prepared to pay up to 10 per cent. Another 36 per cent said they would be willing to pay up to 5 per cent more. The dramatic increase in feed prices has been caused by a number of factors, mainly the doubling of world wheat prices. Industry experts forecast that high wheat prices will prevail for at least the next 12 months. A report by Deloitte & Touche last month stated that food processors can expect no relief in the near future from the sharp surge in commodity prices, pushed upward by supply shortfalls and higher global demand. The health of UK's livestock industry is almost at breaking point and price rises are on the cards, stated Richard Crane, a food and agriculture partner at Deloitte. "A combination of factors is threatening the survival of the UK livestock industry,"​ he stated. "The rising price of wheat and soft commodities are compounding the negative impact of foot and mouth on the UK to a much greater extent."​ Many producers are paying almost double for feed - the largest cost in producing livestock. Crane is even predicting many producers could go under, leaving processors there to search outside the country for their supplies. Only higher prices will allow farmers to continue to meet the increasing demand for local, high quality meat, he said. Drought in Australia, adverse weather in Europe, foot and mouth in the UK, increased demand from China and India, and more supplies going to the biofuels industry are behind the short fall in the normal supply of the major commodities such as grains, meats and milk. Meanwhile the British Poultry Council reported that spiralling wheat prices worldwide are driving up the cost of poultry production making price rises for poultry meat in the UK inevitable. Feed wheat costs are 40 per cent higher than this time last year and almost 70 per cent higher than 2005, the organisation reported. Wheat makes up two thirds of the feed used for chicken, turkey and other poultry in Britain. Other ingredients, especially non-GM soya meal, which is used only in poultry feed in the UK, have also increased at a staggering rate. The International Grains Council is predicting a seven million tonne shortfall in the global wheat supply to meet demand in 2007-8, as it downgraded its harvest estimates to 607m tonnes.

Related topics: Processing & Packaging

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