UK animal feed prices set to rise 10% by year end

A shortage of silage and poor harvests are likely to severely impact upon the cost of animal feed in the latter half of 2010.

Dry weather in the UK has cut the silage yields by up to 50%, something likely to impact upon winter feed.

Russia has been hit by drought, affecting one-third of its crop, which is expected to halve exports, including those to the UK.

Wheat, another contributor to winter feed, has also jumped in price by 30%.

According to Peter Bradnock, chief executive of the British Poultry Council, we are “not in a position to absorb these increases”.

The price changes are likely to see a tightening of producer margins, with only part of the increases passed on to consumers, in all likelihood by early 2011.

Chief economist for the Clydesdale and Yorkshire Banks, Tom Vosa said: "We expect to see an acceleration in food prices and a return to a double-digit increase by early next year if the situation doesn’t change."

>> FMC and other feed producers fined for price fixing

>> OECD predicts up to 40 per cent grain price rises

>> Feed prices force chicken processor to move production

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