Why feed prices have soared

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Northumberland poultry and pig farmers have warned of a crunch time for the industry as rising animal feed prices cut into their profit margins.

As reported in the Gazette last week, the price of crops such as wheat, maize and soya beans – the main components of animal feed – have skyrocketed in recent months due to poor harvests around the world.

Poultry farmers, who spend 60 per cent of their operating costs on feed, have been particularly badly hit.

The cost of producing a dozen eggs has increased by more than seven pence in 2012, while producing chicken meat costs almost nine pence more per kilogram, according to figures released by the National Farmers’ Union (NFU).

But wholesale prices have risen by a far smaller amount, or even gone down – leaving farmers to absorb the costs.

It is a similar story for pig producers, with spiralling production costs failing to match increases in wholesale prices.

Duncan Nelless, who keeps organic chickens and raises pigs under contract at Longhorsley, near Morpeth, said that farmers had been leaving the industry in recent years because of rising costs.

“They are definitely the ones that will see the pinch first – it’s such a grain-based job,” he said.

Mr Nelless’s farm has made an effort to become self-sufficient in order to shield the company from feed costs, he said.

Richard Tulip of Lintz Hall Farm, the North East’s biggest egg producer, which yesterday announced a merger with Sunnyhill Farm near Belford, said that it was a ‘very, very difficult’ time for farms such as his.

“The biggest impact on our prices is out of our hands – it’s very difficult to plan for that,” he said.

But he stressed that wholesalers, who have their own pressures to contend with, could not be held responsible for price shortfalls.

“We’re constantly looking at how we can best economise,” he added.

Christopher Dickinson, poultry adviser for the NFU, said that the poultry industry had been ‘severely hit’ by the ‘huge’ increase in feed prices.

Earlier this month the union, along with other industry leaders, wrote to major retailers calling for them to take into account rising costs in the prices they pay for poultry products.