September 18, 2007

EU to face more meat, milk price hikes

Europeans should brace themselves for further price hikes in meat and dairy with the continuous increase of cereal and feed grain costs, Europe's agriculture commissioner has said.

Mariann Fischer Boel said that high cereal prices had increased animal feed costs and that farmers would soon have to pass those on to consumers.

Poultry is already one-third more expensive than a year ago. As wheat rose 80 percent on-year to August and corn by 50 percent, the European Commission expects price jump on pork by 30 percent and beef, seven percent in 2008.

A combination of bad weather worldwide, growing demand and a moratorium on feed grain exports by major producers Russia and Ukraine has conspired to raise prices.

The commissioner met ministers from the two countries to press for a resumption of exports. She said that their action was not in line with their ambitions to join the World Trade Organization, but refused to be drawn on whether the EU would block Russian membership over the issue.

With butter prices up 50 percent, Fischer Boel will come under pressure from agriculture ministers in a meeting this week to boost milk production quotas.

Gerda Verburg of the Netherlands said milk production quotas should increase by 2 to 3 percent next year. Fischer Boel has said she will look at all options before they are scrapped in 2015.