August 21, 2012

Surge in grain prices boost Germany's poultry meat prices

German poultry farmers are facing bankruptcy and retail prices for poultry meat need to rise due to the surge in grain prices this summer.

"The dramatic rise in animal feed prices in past months is bringing the German poultry sector into great difficulties," the ZDG said on Monday (Aug 20). "As feed makes up the great majority of overall costs to rear the birds, this exorbitant price rise is pushing German poultry producers to the edge of ruin."

Corn and soy prices have reached record highs this summer as the worst drought in 56 years ravaged crops in the US Midwest and a heat wave slashed Russia's grain harvest.

The surge has caused concern the world is facing a sharp rise in food prices. Compound feed prices have risen to their highest level since 1990 and soy prices have risen by 75% above last year's levels, the ZDG said.

The association called on retailers to accept price rises for chicken and turkey meat to compensate farmers for higher feed costs. If retailers reject price increases, farmers are likely to cut poultry meat production, it said. This could lead to tighter supplies of poultry meat into 2013, it said.

German flour mills have also warned rising grain costs could mean rising bread and flour prices.