September 29, 2010


UK feed costs spiral due to GM feed ban


An agreement between Britain's major retailers to prohibit local poultry growers from using GM feed - a measure not imposed on other livestock sectors - has sent feed costs spiraling.


Rob Newbury, NFU chief poultry advisor, said that poultry farmers and consumers were suffering the consequences because of the supermarkets' stance. Coupled with a sharp increase in the price of wheat, he said poultry farmers had insufficient income to cover their costs and had little room for investment.


"On top of the wheat price effect, we are still in the situation where some UK retailers are demanding that chicken producers use non-GM soymeal in the feed ration. These conditions are not imposed on other livestock sectors," he said.


Newbury said the non-GM soy premium was GBP53 (US$83.81) per tonne, or GBP10 (US$15.81) per tonne on a finished ration, and estimated it would cost the entire poultry industry GBP62 million (US$98.1 million) a year.


The sharp increase in soya has been compounded by spiraling wheat prices which has increased from 60% to 80% since July thanks mainly to intense market speculation and the Russian decision to ban wheat exports.


As feed accounts for between 60-70% of the cost of producing eggs and poultry meat, any fluctuation in price has a significant impact on farmers' income, said Newbury. 


Copa-Cogeca secretary-general Pekka Pesonen said pig producers were also suffering from spiraling feed costs, noting that EU pig producers face huge production costs.


He added that feed costs have risen sharply recently, partly due to the speculation in the international cereals market. Thus, EU pig producers are consequently facing major difficulties, especially as they have not had time to recover from the three year crisis in the EU pigmeat sector.


Meanwhile, the European Commission has responded with an announcement to release three million tonnes of grain from intervention stocks to curb the rising feed costs. The measure, which will be rolled out between March and August next year, has been welcomed by the industry.

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