April 14, 2011

Costly fodder brings US$721,400 monthly loss to Estonian pig breeders

Fodder grain's value, the price of which has climbed up to 150% since the fall, is bringing a loss of EUR500,000 (US$721,400) every month to the pig breeding industry in Estonia.

While the price of fodder grain has climbed the price of pork has remained relatively stable. According to farmers each pig generates a loss from EUR10-15 (US$14.43-$21.64) at the present pork and fodder prices.

If we calculate that there are nearly 50,000 fatting animals a month ready to go on sale every month, the sector suffers a loss of at least EUR500,000 (US$721,400) a month, the Estonian Chamber of Agriculture and Commerce said on Wednesday (Apr 13).

Farms have been working at such losses since January when the price of fodder grain climbed above the EUR200 (US$288.56) level per tonne, information of the chamber said.

"The great volatility of the prices of food and agricultural products does not create concern only to consumers; major price fluctuations create serious problems also for farmers as well as to the food industry, said Roomet Sormus, head of the Estonian Chamber of Agriculture and Commerce.

"Although the purchase prices of grain and milk were unbearably low a year or 18 months ago then the drastic price changes make the functioning of the supply chain extremely complicated," he said.

The Estonian Chamber of Agriculture and Commerce Wednesday sent a letter to the agriculture minister, asking for urgent state interference for the alleviation of the pork farmers' situation.

The Chamber finds that an urgent solution is necessary, making it possible for pig-breeders to get short-term loans at favorable terms for purchasing fodder until the new crop.