Industry at the brink

The UK meat industry is on the brink of disaster unless prices rise, leaders and analysts have warned.

Disease, flooding and soaring feed prices have pushed the industry to the edge and it is now calling for an immediate rise in prices at retail level to try and guarantee its future.

Business analysts Deloitte said the combined effects of recent disasters were compounded by an almost 100% rise in feed costs.

"Consumers hold the key to a more resilient future. UK shoppers will have to pay more for their meat," said Richard Crane, food and agriculture partner of Deloitte.

The pig and poultry sectors will be the worst-hit by the surge in feed prices and the British Pig Exective (BPEX) has warned that effects on producers could be "devastating".

"These rises are threatening the very future of the industry," said BPEX chairman Stewart Houston. "Something has to be done within days, not weeks. The situation is really that bad."

Meat & Livestock Commission (MLC) chief executive Richard Lowe said that the nature of the pig industry means farmers might cease production if things do not improve soon. "It is quite easy to exit the pig industry and unless pig farmers see returns within the next few weeks, it will be relatively easy for them to make decisions about stopping production," he said.

Jeremy Blackburn, British Poultry Council (BPC) executive officer said that "the crossroads are coming" for the British poultry sector, which is being crippled by rising costs. "If we do not see an increase in retail prices, a poultry sector would survive, but it might not be the type of poultry sector that retailers and consumers want to see," he said.

"Ironically, it might be retai-lers listening to consumers that ensures we get a price rise, because consumers want to see more British-produced poultry."

It has yet to be seen how supermarkets will react to the crisis. The MLC has claimed that while it is vital for farmers to reclaim the cost of production, increases in price at retail level need not be massive.

"If you take an increase in the cost of production right the way through the chain, by the time it ends up on a pack of meat on a shelf, it is a much more modest percentage increase," said Lowe. "But there is a price war going on between the major supermarkets. It will be interesting to see which retailers move first and by how much."

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