Soaring cost of global meat production to hit consumers

NEW YORK • Producing the world's meat has rarely been this expensive.

Farmers across the world - with more than 40 billion pigs, cows, buffalo, sheep, goats and poultry - are contending with near-record prices for livestock feed as supplies of grains and soya shrink.

Bills for everything from the electricity that keeps their barns well lit and warm to truckers that haul animals to abattoirs have soared.

Crop and energy costs surging in the wake of Russia's war in Ukraine have compounded their woes even as they struggle with everything from droughts curbing grazing lands to bird flu outbreaks from North America to Europe that wiped out millions of poultry.

Hit from all sides, many farmers are selling livestock or breeding fewer, showing output will be capped in the longer term.

The number of beef cows being slaughtered in the United States is the highest since records started in 1986 and those cows not giving birth to calves will result in smaller herds.

That means meat prices - already at record highs - would not fade fast, further weighing on household budgets that are straining under higher costs for other staples and necessities.

The United Nations' Food and Agriculture Organisation (FAO) meat-price index has risen 10 per cent since the beginning of the year, hitting a record last month.

In the US, prices of bacon, chicken breasts and ground beef have never been higher.

The global production of pork, chicken and beef will slow to a 1.4 per cent advance this year, versus 5.4 per cent last year, the US government forecasts.

Russia's invasion has slowed Ukraine grain exports to a trickle, curbing corn supplies that major hog producers like Spain and China rely on. Feed makes up the bulk of the cost to raise livestock and even for countries that produce their own, crop prices have scaled dizzying heights.

Wholesale pork prices in Britain have risen, but do not cover production costs, putting farmers on track for an "unprecedented" sixth straight quarter of losses, according to Ms Zoe Davies, chief executive of the UK's National Pig Association. Pig farmers in the United Kingdom were already reeling under labour shortages at meat plants that left over 100,000 pigs backlogged for slaughter this year. Farmers culled animals as farm space ran out.

Just as the situation was improving, Russia's war erupted. The conflict "has amplified a whole range of things we were already struggling with", said Mr Rupert Claxton, meat director at consultant Gira.

Pork output in the European Union, the world's top exporter, will fall 3 per cent this year, the first drop since 2019, the government estimates. Rising prices are not offsetting costs, likely prompting farmers to slaughter animals earlier than usual.

In China, home to half the world's hogs, record feed expenses and a prolonged slump in pork prices have spurred staggering losses at top hog breeders. After just recovering from a lethal swine fever outbreak, that has put growth in a downturn again, with sow numbers falling for eight straight months.

Some farms can weather the expenses, but disease and droughts are still taking a toll.

An avian influenza sweeping across the Northern Hemisphere killed nearly 38 million birds - mostly turkeys and egg-laying hens - in the US, one of the worst-ever outbreaks. France's south-western foie gras region also faced a mass cull for a second year and Polish chicken farms suffered cases.

Bad weather is an added hurdle. In southern Alberta, Canada, drought has scorched pasture grasses and cropland in the past year. In Argentina, wildfires killed 700,000 cattle in February and March, while pastures across the Pampas farm belt have suffered drought that is reducing calving and has put the herd on course for a six-year low.

British cattle and sheep, which mainly rely on grazing, will not have as much forage to last through winter as expensive fertiliser means less will be spread on pasture or hay fields, said Mr Richard Findlay, head of the National Farmers Union beef and lamb board.

Those rising expenses will make their way to supermarkets.

"Producers can't bear the entire cost," said Mr Upali Galketi Aratchilage at the FAO. "It's very likely we see consumers paying more, at least for the foreseeable future."

BLOOMBERG