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Soaring Feed Costs Hurting Pig and Poultry Industry

by 5m Editor
17 July 2007, at 6:51am

UK - With the cereal sector benefiting from a much-needed and justified rise in prices, pig and poultry producers are struggling with associated rises in feed costs which aren’t being reflected in the market price, according to NFU Scotland.

The cost of pig production has risen by around 11 pence per kilogram (p/kg) compared to this time last year. However, the prices paid to farmers have risen by only around 3 pence and there are even signs of pressure on that from retailers. The spot price for pigs has reduced by 4 p/kg in the last fortnight.

As a result, NFUS is writing to all the major supermarkets to make them aware of the pressure being felt at the farmgate.

Robin Traquair is Chairman of NFU Scotland’s Pig and Poultry Committee and a pig producer from Midlothian. He said:

“I’ve spoken to pig producers who are all hugely concerned at the rising cost of grain for feed. The same is true across the poultrymeat and egg sectors. No-one begrudges cereal producers getting a much-needed and justified rise in their prices, However, our biggest customers need to recognise that it has a major impact on our cost of production, which has gone up dramatically for all of us.

“My cost of production will now be around 110p/kg, yet the market price for pigmeat is currently below that. That means I’m not even breaking even at the moment, let alone making money to reinvest in the business. The drop in the spot price this month has fuelled industry concerns.

“The major supermarkets are not the only market for pig meat, but they are the most influential. I am telling them that if they want to send a message that quality food is wanted and give confidence to suppliers, they need to recognise that the cost of production has risen sharply for us.”

Chairman of the NFUS North East region is Philip Sleigh, a pig producer near Inverurie. He said:

“There have been a lot of news headlines over the last few days about price increases on bread because wheat prices have risen. I’m also having to spend significant extra money myself because the price of grain for feed has risen sharply – I am spending between £4500-£5000 extra per month on feed. However, there is no recognition of that in the price I’m being paid for my pigs.

“The supermarkets need to be aware of the pressure being felt on the farm and processors need to send them that message as well. In short, the big retailers need to pay more for Scottish pig and poultry products and certainly not make farmers the victim of either rising feed costs or high street price wars. We also shouldn’t presume that shoppers should always have to pay more – supermarkets could simply make a small dent in their very large margins.”

5m Editor