UK wheat farmers face a US$64.20/tonne price hike

The dramatic rise of US$64.20/tonne in UK's wheat prices is already impacting on the price of feed, a situation that is going to get worse over the next few months, a local farmer said.

Mr Hind said pig and poultry producers appeared to be more exposed to the sudden price rise than during last spike, as fewer had taken advantage of the opportunity to buy forward than in 2008.

Pig levy body BPEX has estimated that overall costs of pig production will rise from 137.2p/kg in June 2010 to 158.3p/kg in November.

This comes against a backdrop of falling pig prices have been on been on the slide. There are indications, however, that the market has reached the bottom.

The National Pig Association has re-launched its 'Pigs Are Worth It' campaign, under the new banner of 'Pigs Are STILL Worth IT'. NPA chairman Stewart Houston has sent a letter to all retailers explaining the issues facing producers and encouraging supply chains not to forget the painful lessons of 2007/08.

Rising wheat prices are also partly responsible - along with increased global demand, limited spare manufacturing capacity and lower than average stocks-for driving fertiliser prices up.

Mr Hind predicted further fluctuations in wheat price over the next few months. Even though there is not an overall world shortage of wheat, there were still 'many uncertainties' surrounding the wheat price, such as who holds the stocks and how they are going to be used,  the impact of the weather on plantings, unilateral export restrictions and speculation.

The situation in Russia would be critical, he said, as the current Russian export ban, for example, had removed the cheapest source of wheat from export markets.