September 2, 2010

High grain prices hurt French livestock farmers

French farmers have called for urgent measures to address the problem of rising feed costs as a result of surging grain prices following Russia's drought.

The surge in grain markets, with European wheat futures up by more than 50% since the end of June, has raised the cost of grain-based animal feed and has intensified financial pressures on breeders already facing weak prices for pork and beef, said France's main farm union, the FNSEA.

"Livestock farming continues to be in an extremely difficult situation," FNSEA president Jean-Michel Lemetayer told a news conference, citing pig and cattle breeders as the most affected. "The jump in cereal commodity prices has immediate consequences for the price of animal feed."

Higher input costs have added to low prices paid to breeders as the French livestock sector has been pressured by a flow of cheaper imports, officials said.

According to latest data from France's statistics office, pork prices fell 3.8% and beef by 0.4% in July versus the prior month, whereas the overall index of farm prices rose 2.9% on the back of a 26.6% jump for cereals.

The FNSEA planned to organise a meeting of pork-sector operators on Monday (Sep 6) to discuss possible measures, a week before Agriculture Minister Bruno Le Maire is due to announce extra support for livestock at a farm show in Brittany.

Cattle farmers in parts of western France are also seeing increased costs due to a drought, which has ruined pastureland and forced farmers to buy more feed, the FNSEA said.

Dairy farmers will get some relief from a price rise agreed with processors for the rest of the year, officials said, defending a deal that the FNSEA backed in the face of attacks from other farm unions seeking a bigger price hike.