July 12, 2012

Consumers to shoulder grain price increase

In order to avoid hurting breeders who use cereals to feed their animals, the head of France's largest farm union said on Wednesday (July 11) that the recent rally in grain prices is excessive and should be passed on to consumers in meat prices.

Wheat and corn prices in Europe have surged around 25% since mid-June and US soymeal, widely used in feed in Europe, hit an all-time high on Wednesday (July 11) as concerns mounted over serious drought-related damage to crops in the US and lower than forecast harvests in Ukraine and Russia.

"If you look over the past three weeks there is no objective justification to see prices rocket like they are now," said Xavier Beulin, head of the FNSEA, by far France's largest farm union, and a grain grower himself.

"We are really concerned because we see the spectre of 2007-08 with this rally, partly amplified by financial speculation to make prices rise," he said.

World food prices increased dramatically in 2007 and the first half of 2008, leading to global political and economic instability that prompted riots in some poor countries.

Beulin said he would ask that the French body which monitors food prices and margins use an agreement sealed last year with the retail industry to start talks, mainly with supermarkets, so that consumer prices such as those for milk, beef or poultry be indexed on the rise in grain prices.