August 30, 2007

Developing world causing rise in global meat prices

Consumers in the Western hemisphere are likely to face price hikes as floods and bad weather conditions on top of rising demand lead to a shortage of food supplies in the Eastern half of the world, market analysts said.

Western farmers are facing increasing costs for livestock feed and it is only a matter of time before the supermarkets pass the increases on to the consumer, according to Deloitte & Touche LLP.

Prices for livestock feed are being forced up by poor harvests, demands from the biofuel industry and rapidly rising consumption in Asia, the research agency said.

Increased demand for grain and meat worldwide has been led by China and India, where consumers have more money to spend on food due to their expanding economies. Demand for dairy products has also been rising, particularly in China, which would affect milk prices as far away as Britain, the agency said.

Richard Crane, a partner at Deloitte, said western shoppers would have to pay more for their meat as changing consumption patterns in China, India and other developing nations force up prices long term.

The real pressure is coming from the developing world, he added.