September 6, 2007

French pig industry in crisis due to high grain prices

French pig farmers are warning that the rise in grain prices would lead to a pork shortage in France if producers would not be able to pass on costs to consumers.

The country now joins Germany and the UK where pork producers are being severely impacted by high grain prices.

Production cost per kilograme of pork were up 33 percent in France, from US$1.69 to US$2.14 early August, according to cost studies.

The present crisis is on an unprecedented scale, said Guillaume Roue, president of Inaporc, an umbrella association of French pork producers.

Grain prices worldwide have soared to record levels, with wheat doubling in less than four months amidst growing demand and the lowest stockpile in 25 years.

France could face a meat shortage in a year if the situation continues, Roue said.

Grains make up 70 percent of pig feed, and half the total pork production costs in France.

Wheat prices have risen 33 percent from EUR 220 in early August to EUR 300 currently.

Breeders say they cannot pass on higher costs on consumers as supermarkets refuse to pay more.

Politics also comes into play here as the French government has asked supermarkets to limit the rise in food products to protect consumer buying power.