September 29, 2008

Feed prices may have stabilised or even declined, but farmers are facing new challenges such as high energy and water costs.

Wheat prices have declined due to large harvest prospects this year, with feed wheat in abundance, while corn and feed barley markets have also eased, according to Albert Vernooij, meat sector analyst at Rabobank in the Netherlands.

Robert Newberry, poultry adviser at Britain's National Farmers' Union said, "Other significant costs like energy and even inputs like water are getting more and more expensive so overall the input costs are on the rise for poultry producers."

Poultry with a shorter lifecycle, responds more quickly to changes in production costs. However, there is less correlation for other meats such as pork and beef.

It will take sometime before animal supply changes to reflect different feed prices, said Vernooij.

"For poultry, we could see an effect starting in three to six months, for pork it should take more than a year and in beef you have not seen a real reaction in prices to feeds costs, because that cycle takes two to three years," Vernooij said.