i) Arla Foods warns of rising production costs
Arla Foods, the largest supplier of fresh milk and cream in the UK, has warned that farmers can no longer cover their expenses, with some experiencing increases of around 35 percent. According to Arla, the cost of milk in supermarkets is 7 percent lower than it was 10 years ago in real terms.
Recent milk prices have reached over 40 pence per litre for May, however, Kite Consulting has said that processors will need to seek to pay nearer 50ppl if they wish to reverse the drop in milk production.
ii) EU food and agriculture imports may need to meet EU standards
The European Union (EU) has recently announced plans to ensure that all food and agricultural products imported to the EU meet their health and environmental standards.
Farmers and ranchers in the United States and many European producers and exporters are expressing opposition to the plans. European exporters might face retaliatory duties if the World Trade Organisation finds that forced EU standards are non-compliant with trade agreements.
iii) Warnings of egg shortages due to costs of production
The British Egg Industry Council (BEIC) has warned of shortages of eggs due to soaring costs of production.
The cost of feed for egg laying birds is now £400 per tonne, up by around 50% over the past two years. Transport costs have risen around 30%, the price of labour has risen around 7%, the price of pellets has increased by 15%, and the wholesale cost of gas from suppliers has increased by 250% since the start of 2021.
2 Sisters Food Group’s CEO Ronald Kers has also warned of a major threat to UK food security as a result of the Ukraine war.