Beef and sheep farmers will be familiar with the increases in commodity prices that have been very evident in the last few months as societies reopen after Covid-19 and economies start to rebuild.
It has been outlined in the Gira mid-year update that global feed prices started an upward rise in June 2020, as China started to rebuild pig herds on the back of African Swine Fever (ASF) culls.
It was noted in the twelve months from June 2020 to June 2021, that soybean meal prices increased by 30%, wheat prices rose by 34% and corn prices increased by 103%.
Once-off events such as a spike in global demand for heavy industrial production of Covid-19 sanitiser products also contributed to the rise of corn prices, according to the Livestock and Meat Commission’s (LMC’s) analysis of the Gira report.
With oil prices back up to 2018 levels and other production costs rising due to trade disruption, increased transit times and access to containers for transporting goods, the costs in supply chains have moved up significantly, according to the LMC.
It was also noted that, labour availability across the entire value chain is proving problematic at the current time.
This will further drive up costs as different sectors compete for workers with transferable skills, according to the report.
Concluding, the LMC outlined: “Recovering production cost increases from end consumers through increased retail prices is always challenging and can be detrimental to sales volumes – so striking the right balance is essential.”