Drought has raised cost of corn, soy
San Francisco, CA -- (SBWIRE) -- 10/19/2012 -- Farmers are warning of a global shortage of bacon and pork caused by historic droughts in Russia and the United States.
U.S. farmers say that production will be reduced because of rising feed costs, and Britain’s National Pig Association predicts that shortfalls next year will be “unavoidable.”
The Guardian reports dwindling numbers of swine throughout Europe. Farmers in Germany, the biggest pork producer in Europe, reduced their herds 1.3% in June compared with a year earlier; Ireland’s farmers cut back 6.6%, and in Denmark, herds have decreased 2.3%.
Bacon in the United States costs more now than it did in 2006, said Steve Meyer of Paragon Economics and a National Pork Producers Council adviser.
“It’s not that people don’t want to eat pork,” Meyer told the Guardian, “it’s just that they increasingly can’t afford to.”
Annual pork consumption per person is expected to fall to 44.16 pounds in 2013 from 50.8 pounds in 2007.
“We’ve been warning about this for years,” Meyer said. “Now that we are talking about bacon, we’ve really got everyone’s attention.”
Surging corn and soy prices, caused by the drought this year, have affected pork producers. The cost to produce 100 pounds of pork has been rising, Meyer said. It was $52.76 in 1999-2006 but he expects it to surpass $100 in 2013.
The high cost of feed has been worsened by a U.S. mandate that 10% of the country’s fuel must be made from ethanol, which is based on corn.
The U.S. ethanol subsidy and high prices have a global impact, according to Zoe Davies, the National Pig Association’s general manager. Farmers are slaughtering more pigs, intending to get out of pork production. She expects 35,000 sows will have been killed early by the end of the year.
“The market will sort this out,” Davies told the Guardian. “People will go out of business, there will be less pork products and prices will rise.”
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