Meat processors now say they need their supermarket customers to pay them 7% more for their meat, not 6% as previously requested.
Grampian Country Food Group, which is leading the bid to boost returns in the face of rising costs, said it had recalculated the figure because of changing exchange rates and oil prices, and the cost of new environmental regulations, which it had not previously taken into consideration.
Philip Wilkinson, MD of Grampian’s chicken business, said: “Just since we have launched the initiative in mid-June, oil prices have continued to go in a northerly direction.
“But the pound has also continued its slide against the
dollar pushing up the price of soya, which is a key ingredient in animal feed.
“The price of soya itself is also rising, because farmers in North America have not had the levels of rain required and are therefore estimating a poorer crop than usual. This has been reflected in higher spot prices for soya on the futures market.”
Wilkinson said the cost to pig and poultry farmers of implementing the strict new environmental IPPC regulations - designed to limit pollution - was also piling on the pressure.
He claimed that there was “subliminal support” for the price initiative at the major retailers and expected to see some upward movement in prices as early as next week.
He added: “There is an understanding that something needs to be done to ensure the sustainability of the meat production industry.”
Grampian’s request for a 7% rise is based on a 3% increase in the cost of fuel, 2% on feed, 1% on packaging and 1% on the falling value of the pound and the cost of implementing IPPC.
The initiative is backed by farmers, to whom Grampian has pledged to pass on up to one third of any price increase.
Richard Clarke