May 25, 2011

Drought conditions create difficult year for EU animal feed industry

Persistent dry weather across Europe is set to push the price of cereals and grains ever higher, affecting the region's animal feed industry.

According to data from the Department for Environment, Food and Rural Affairs (Defra), the UK has had just 61% of its normal rainfall in the last three months.

In addition, soil in the north of France was the driest it had been at the end of April for 50 years. This means that crop harvests are being reduced, pushing already high grain prices further upwards.

Allan Wilkinson, head of agriculture for HSBC, said that UK oilseed and grain yields may be cut by as much as 20%, but straw and corn for the animal feed industry is likely to be worse affected.

Defra has also warned that UK rivers are running at extremely low levels.