The BBC and several newspapers are reporting that food prices are set to rise because farmers are culling their pig and cattle herds in the wake of rocketing livestock feed prices.
The media emphasis is that the contraction in herds and the resulting meat shortages will “hit consumers’ pockets”, sidestepping the fact that consumers are a driving factor in the cull.
Consumers demand low prices. They expect prices to fall year on year. Supermarkets compete hard to maintain market share so they keep prices artificially low and push the burden back to processors who pass it back to farmers.
Farmers face rocketing input costs, particularly feedstuffs and fuel, but can’t recoup those costs because the price they receive for their cattle and pigs is far too low.
Even the biggest, most efficient industrial farms are finding it difficult to break even, much less make a profit. As a result, they’re cutting their losses and culling their herds, which will mean an initial dip in prices followed by restrictions in supply and rising prices.
It’s happened to us on the croft and it’s happening all the way up the scale. If consumers won’t pay a fair price that covers the costs of production, then they will have either have to go without or pay more for an increasingly scarce product.
The mass slaughter of millions of farm animals across the world is expected to push food prices to their highest ever levels.
As well as hitting consumers pockets, the predicted 14% jump in food prices will also dash the Bank of Englands hopes of pushing inflation down to 2% by next year.
Farmers across the world have begun a mass slaughter of their pig and cattle herds because they cannot afford the cost of feed, which has soared following the worst US drought in living memory, according to a report published on Wednesday.
- Options are Limited for Livestock Producers Facing Drought (nationalhogfarmer.com)
- Food prices jump will hit poor, World Bank Warns (bbc.co.uk)
- Pork prices could double unless retailers act (farmersguardian.com)