Food Prices To Soar After Mass Animal Slaughter
A mass slaughter of farm animals across the world is expected as food prices are forecast to reach new record highs, according to a new report.
Research by investment bank Rabobank said consumers should brace for a 15% rise in food prices, as farmers struggle to cope with the soaring costs of animal feed and slaughter more of their stock.
The worst drought in the US for almost a century, combined with droughts in South America and Russia, have hit the production of crops used in animal feed - such as corn and soybeans - especially hard, the report said.
As a result farmers have begun slaughtering more pigs and cattle, temporarily increasing the meat supply - but causing a steep rise in the price of meat in the long-term as production slows.
"Farmers producing meat are simply not making enough money at the moment because of the high cost of feed," Nick Higgins, commodity analyst at Rabobank, told Sky News.
"As a result they will reduce their stock - both by slaughtering more animals and by not replacing them."
The "mass liquidation" of animals - which Rabobank said will pick up pace in the beginning of 2013 - will contribute to food prices hitting new highs.
The cost of pork is expected to rise at the fastest pace - by 31% by the end of June next year - while beef costs could increase by up to 8%.
"This record cost of meat and dairy will combine with already-high crop prices to increase food prices by 15% by the middle of next year," Mr Higgins added.
This would see food prices reach their highest level on record, up by 175% compared to the year 2000.
But the report stressed that the current situation is very different to the crisis of 2008 - in which food stables of the world's developing economies, like wheat and rice, were severely affected.
The bank's research follows official figures that showed inflation had slipped back to 2.5% in the UK - closer to the Bank of England's inflation target of 2%
But Mr Higgins warned that next year's food price rise could push inflation in the UK higher, and so further away from the Bank's target.
what do you think?
But the ONS would say that inflation is still falling even if everything increased by 1000000%
Well that is a sure way to push up prices and increase sales
Droughts in USA, Russia and Asia will affect food prices hugely in 2013 - stock up your freezer with meat now while the prices are lower
simple people will just buy a lot less,then through overstock they will have to lower it or throw it,it amazes me some of these meat prices, some places £9.99 a kg yet sainsburys are shifting it for £4.99 on offer again so shows the price of greed o f supermarket domination