With feed prices rising, pig meat producers in the UK coming off contracts could be facing, on average, an extra £12 a metric ton to renew.
This equates to as much as 4p per kg deadweight according to a feed cost
report just published by the British Pig Executive (BPEX).
BPEX said there
is a whole range of factors driving the price increases for cereals, including
the drought affecting EU production, low cereal stock levels, fears about new
importers and the rise in interest in biofuels.
In the UK for example, a biofuel plant is under
construction which will take 750,000 metric tons of wheat a year. Report author
Tony Fowler, BPEX Senior Economic Analyst, said: “Biofuels are being promoted by
governments around the world as a sustainable energy source. “The downside of
this is that as they compete with animals and humans for feed, prices will be
Further rise in prices
Prices are set to
show some further rises through the remainder of the current season, which will
push up pig production costs. “But more plentiful EU supplies combined with
adequate sources in the Ukraine and North America and lower soya prices should
mean that prices are unlikely to approach the high levels of 2003/04,” said BPEX
KT Manager Richard Bull. “However continuing uncertainty over the southern
hemisphere harvests is likely to lead to some volatility in cereal prices over
the next few months”, according to Bull.