The price of local pork could rise further as farmers struggle to make a living due to the historically high cost of pig feed, the Pig Breeders Co-operative (KIM) warned.
Grain and cereal prices on an international level have been rising since 2007
The current average price of pork carcasses sold by KIM is €2.07 per kg, up from €1.87 per kg last month.
“Should production costs continue to rise this year, as is currently the trend, we will have no choice but to increase the cost of local pork proportionally, in the hope that the consumer understands the situation and continues to buy the local product,” said KIM general manager Oliver Frendo.
Grain and cereal prices have been rising internationally, mainly because of a prolonged drought in the US and other major grain and cereals producing countries, as well as increasing demand from China.
Imported cereals are the main constituent of pig feed, accounting for more than 80 per cent of the cost of pork production locally.
KIM has unsuccessfully sought Government aid “desperately and repeatedly” over the last few months, in an effort to keep product prices stable without bankrupting farmers, said Mr Frendo.
“The message we have received was basically that every sector, including food production, is expected to fend for themselves, even during this acknowledged international crisis,” Mr Frendo said.
Reduced profits and fluctuating production costs have caused many farmers to seek other sources of income or stop farming altogether, Mr Frendo added.
KIM came to the assistance of famers when cereal prices increased by almost €40 euro per ton in June and the price of pork could not be increased until August.
It paid out the difference for June and July, “but the sums of money and frequency of price hikes in recent months are such that the Coop cannot afford do this every time,” Mr Frendo warned.
The Dairy Farmers Co-operative (KPH) said its members were also facing great pressure and difficulties due to the rising price of animal feed.
The price of local milk rose by four cents per litre last month and KPH spokesman Brian Vella warned there may be more price rises in future.
“It depends how long the surge in cereal and other feed material prices will continue but for the time being, the outlook is not very optimistic,” Mr Vella said.
KPH had been regular contact with government about the problems the industry was facing and “without doubt dairy farmers expect (Government) support, especially in times like this,” Mr Vella said.
Increasing feed costs have added to the burden farmers faced after investing millions of euros to restructure their farms to meet EU regulations, he added.
Grain and cereal prices on an international level have been rising since 2007, with only a brief respite in 2008.
Agri-commodities market analyst Steve Cachia warned that prices have still not peaked, and record grain prices on the international market have still not been fully absorbed by the retail market.
“Cooking oil, margarine, eggs, milk and meats – especially poultry – should be the first products to reflect price increases in the grain market,” he said.
Although Malta is mostly at the mercy of international markets, Mr Cachia said intelligent purchasing strategies, timely analysis and good use of the futures market could help to protect the country from market fluctuations and ensure price stability for consumers.
pcooke@timesofmalta.com