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Farm gate prices will have to rise as feed costs soar.

by 5m Editor
24 July 2007, at 6:13am

NORTHERN IRELAND - UFU President Kenneth Sharkey has highlighted the need for farm gate prices to rise as feed costs soar.

Mr Sharkey said that while UFU is pleased to see returns improving for the arable sector, there are serious concerns emerging about the economics of producing pigs, poultry, winter finished cattle and indeed all livestock production in the year ahead.

"With these producers facing significant increases in costs it is absolutely critical that they receive higher farm gate prices so that cost increases can be absorbed. We will be raising this with the major retailers who must accept that as farmers costs rise, this must be accounted for in farm gate prices,” he said.

UFU says it will stress how global grain supplies are at their lowest level in 28 years and that EU intervention stocks of grain are practically non-existent. The Union says that current high feed prices are likely to persist due to a combination of poor cereal harvests in several major grain producing countries and growing demand for the production of bio-ethanol, particularly in the United States.

Mr Sharkey said that feed wheat and barley prices are almost 40 per cent higher than last year and this is directly pushing up farm costs. "If you look at forward prices for grain it looks like we are facing a sustained period of higher feed costs. Farm gate prices will have to rise to account for this. Retailers must look urgently at this serious situation and show us that they mean what they say when they talk about their commitment to local food supplies and local farmers,” he added.

A representative from UFU's Pork and Bacon Committee said that pig prices for local producers hadn’t changed since last October, whereas the wheat price has increased in by £40/tonne. Feed costs since have gone up approximately 30 per cent since last October, alongside price rises for other input costs such as electricity and fuel. It is putting enormous pressure on profitability and farm incomes.

5m Editor