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Farm Gate Prices Will Have To Rise As Feed Costs Soar.

by 5m Editor
24 July 2007, at 6:14am

UK - UFU President Kenneth Sharkey has highlighted the need for farm gate prices to rise as feed costs soar. Mr Sharkey said; “While we are 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”.

The UFU says it will highlight to retailers that global grain supplies are at their lowest level in 28 years and EU intervention stocks of grain are practically non-existent. The Union says the 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.

Kenneth Sharkey said; “Feed wheat and barley prices are almost 40% higher than last year and this is directly pushing up farm costs. And 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”.

A representative from the UFU Pork and Bacon Committee said that pig prices for local producers hadn’t changed since last October whereas Wheat has increased in price by £40/tonne . He told farming Life that feed costs since last October have gone up approximately 30% along with other costs such as electricity and fuel. This is putting enormous pressure on profits.

5m Editor