Healthy soil and sustainable growing

["TradingPostPaul" <tradingpost@riseup.net>]

http://www.timesonline.co.uk/tol/news/uk/article2344071.ece

August 29, 2007
Meat prices rise as East turns West for food
Lewis Smith, Environment Reporter

Consumers are likely to be hit by price rises for meat and dairy products
as the Far East competes with the West for stocks, market analysts claim.

Farmers are facing increasing costs for livestock feed and the supermarkets
will, sooner or later, pass the increases on to the consumer, according to
Deloitte & Touche LLP.

Prices for livestock feed are being forced up by poor harvests, demands
from the biofuel industry and rapidly rising consumption in Asia. The
rising costs of feed have been compounded in Britain by the summer floods,
the poor weather and the outbreak of foot-and-mouth disease that have
damaged crops, reduced yields and halted meat exports.

Increased demand for grain and meat worldwide has been led by China and
India, where consumers have more money to spend on foodstuffs because of
their expanding economies.

Demand for dairy products has also been rising, particularly in China, and
in Britain milk prices could rise as farmers turn to supplying the powdered
milk export market.

British meat farmers are facing renewed pressure on profit margins because
of the price of livestock feed, which has doubled in price since last year,
Richard Crane, a partner at Deloitte, said. “Consumers hold the key to a
more resilient future,” he added. “UK shoppers will have to pay more
for their meat. Increased prices will allow farmers to continue to meet the
increasing demand for local, high-quality meat. This is likely to be the
inevitable cost of securing and also safeguarding the future of UK meat
production. Without it, the opportunity to enjoy home-grown quality produce
and British meat could become a rarity on supermarket shelves.”

He said that the changing global patterns of demand as China, India and
other developing nations compete for food supplies, is likely to be a
factor that will force up prices long term.

Mr Crane addded: “The real pressure is coming from the developing world.
We’ve been used over the last ten years to have food deflation. It looks
like the worm has turned.”

His comments came after last week’s warning from the National Association
of British and Irish Millers that rocketing wheat costs would push up the
price of bread. Wheat prices have hit a record high recently because of
poor harvests and increasing global demand, the association said. Prices
for a tonne of wheat have increased from £80 a year ago to almost £150
and farmers are signing contracts for 2008 and 2009 harvests that are well
above £100 a tonne.

Huw Thomas, of the Milk Development Council, said that supermarkets had
absorbed rising production costs for milk but would at some point pass them
on to the consumer. Dairy commodities, such as butter, cheese and powdered
milk, have risen 40 per cent in the past nine months as worldwide demand
increases by 3 per cent per year, outsripping the 1 per cent increase in
supply.

China has traditionally consumed few dairy products but in recent years the
Chinese have developed a taste for yoghurt, cheese and milk. Milk prices
have risen from about 17p per litre to almost 25p in recent months and as
farmers reach the end of supply contracts they are considering sending
their milk to Asia in powdered form instead of supplying the home market.