Realistic Pricing Essential For Livestock Industry

UK - Supermarkets must recognise the need for higher milk, pig and poultry meat prices, otherwise the UK's livestock industry faces a serious threat to its future, warns Tony Bell, Chairman of the Agricultural Industries Confederation's Feed Executive Committee.
calendar icon 17 August 2007
clock icon 2 minute read

Livestock producers face unprecedented increases in feedstuff prices as raw material costs rise sharply. EU and world cereal production was lower last year due to widespread drought. This year EU production was affected first by a drought in spring then severe wet weather in July, particularly in the UK. We are seeing unprecedented increases in wheat and barley prices.

"Wheat prices for harvest 2007 are now over £75/tonne higher than a year ago, a doubling in price" says Mr Bell.

The USA has rushed headlong into embracing arable crops as a source of renewable energy. Now more US maize is converted into ethanol than is exported, this being more than 20% of the US crop. This has led to maize prices soaring to up to double the previous year. As US maize demand has risen, the soyabean area has reduced leading to higher soyabean meal prices.

Increases in these two basic ingredients have resulted in similar increases for other commodities like wheatfeed, palm kernel sunflower meal.

"Livestock farmers need to see increases in the price they receive, as already many are questioning whether they should cut back on production or even exit the industry," warns Mr Bell. "The current shifts in supply and demand add up to a serious threat to the animal feed and livestock production sectors.

"We welcome comment from one supermarket that they will pay market prices reflecting the increased production costs. This needs to be implemented quickly before damage is done to our livestock industry, and we come to rely more on imported produce, produced to lower welfare standards than the UK."

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