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Meat and bread prices to rise in Britain after flooding, foot and mouth raise farming costs

Meat and bread prices to rise in Britain after flooding, foot and mouth raise farming costs

British consumers are facing higher prices for food staples, including milk, bread, potatoes and meat, because of a disastrous domestic farming season that has encompassed devastating floods and a foot-and-mouth scare.
Financial advisory firm Deloitte said Tuesday that meat prices will have to rise to support the domestic industry, which it suggested was close to "breaking point."
"A combination of factors is threatening the survival of the U.K. livestock industry," said Richard Crane, food and agriculture partner at Deloitte. "The rising price of wheat and soft commodities are compounding the negative impact of foot and mouth on the U.K. to a much greater extent."
Britons have heard a rash of warnings on staple foods this month _ the National Association of British and Irish Millers has said that rocketing wheat costs would push up the price of bread, while the British Potato Council has reported difficult harvesting conditions because of the floods that hit the country in July.
The sharp rise in wheat prices comes after heavy rains in Western Europe, including the British floods, and a drought in Eastern Europe devastated crops. Wheat prices surged to a record of US$7.44 a bushel last week on the benchmark Chicago Board of Trade market.
Bread-making wheat is now fetching around 200 pounds (US$400; euro290) per ton in Britain _ double last year's level.
"It is inevitable that consumers will see the cost of their daily loaf continue to rise," said Federation of Bakers director Gordon Polson.
Britain's farming woes have been deepened by the ongoing repercussions of this month's foot-and-mouth scare. The highly contagious disease, first confirmed Aug. 3, struck two cattle farms 30 miles (50 kilometers) southwest of London and sparked worries of a repeat of a major 2001 outbreak, when 7 million animals were slaughtered and British meat was shut out of world markets for months.
Those fears were discounted when it was confirmed the outbreak had been contained. A ban on livestock movement has been lifted, meaning that meat processors can restart production. The European Union also lifted its ban on exports of British livestock, meat and dairy products last week, with the exception of a small zone around the infected farms.
However, Crane said export profits could be hit if foreign markets remain suspicious of British meat.
"If foreign markets close their doors to U.K. meat exports there could be cause for concern," he said.
Crane said that British consumers "hold the key to a more resilient future."
"U.K. shoppers will have to pay more for their meat," he said. "Increased prices will allow farmers to continue to meet the increasing demand for local, high-quality meat."
Richard Lowe, chief executive of the Meat and Livestock Commission, said "modest increases" in prices were expected because of higher feed costs.
Supermarket price wars have also been cited by some farmers as a key factor in the industry's woes and Crane said retailers may have to rethink their low meat price strategies.
The flip side, however, is that high prices could stop consumers buying meat altogether, producing the same result.
National Farmers Union official Martin Howlett said that consumers should not bear the brunt of rising costs alone and called on supermarkets to share out the profits made from meat sales.
"From a business point of view they can't just put the prices up and hope that the consumer will take the knock," he said.


Updated : 2021-05-16 02:51 GMT+08:00