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Soaring feed costs due to drought mean meat producers must have price increase

by 5m Editor
17 August 2003, at 12:00am

UK - Soaring animal feed raw material prices means British meat producers must see a price increase of 10-15 percent.

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In the last eight months the main animal feed ingredient, wheat, has increased by 46 percent, equivalent to 328 a tonne, due to predicted shortages in the worldwide supply of wheat caused by adverse weather conditions resulting in the lowest world stock position in eight years.

Although raw material prices have increased significantly, the cost of the consumer food products has not changed significantly, says NPA executive director Stewart Houston.

World wheat output is estimated at 549 million tonnes, versus the estimate made four weeks ago of 560 million tonnes. Eastern Europe's wheat production is at a 30 year low and EU production has been revised down from 99.5 million tonnes to 94.5million tonnes. Industry experts do not anticipate prices to fall back. Source: USDA (United States Department of Agriculture) figures.

Week ending Friday Feed wheat avg. ex farm price Year on year increase
16/08/2002 352.73
08/08/2003 378.14 48.18%

Source: HGCA daily ex-farm spot prices - weekly averages

Source: National Pig Association - 17th August 2003

5m Editor