Meat prices forecast to soar

The combination of foot-and-mouth, floods and rising grain prices is set to push up the price of British meat.

Business advisory firm Deloitte says the health of the UK's livestock industry is almost at breaking point. Despite pressure from supermarkets to keep prices low, farmers will have to pass on price rises to stay in business.

While the EU has lifted the ban on UK meat, Deloitte says exports are likely to remain at lower levels, putting some UK producers out of business entirely.

Richard Crane, food and agriculture partner at Deloitte, said: "A combination of factors is threatening the survival of the UK livestock industry.

"The rising price of wheat and soft commodities are compounding the negative impact of foot-and-mouth on the UK to a much greater extent."

The impact of flooding across much of Europe, as well as demand for grain for biofuel production, has pushed up the price of animal feed.

Mr Crane added that increased prices would allow farmers to continue to meet demand for local, high quality meat, but stressed the meat industry had suffered a "major blow" because of the loss of business.

Deloitte believes the fall in meat production will give overseas producers an opportunity. Many pub groups, especially at the value-for-money end of the market, rely on imported meat to maintain prices.

Kevin Berkins, owner and licensee of the Fence Gate Inn in Lancashire, said: "we are seeing price increases, as well as shortages from some suppliers." The pub increased the price of fillet stake on its specials board by £1.50 over the Bank Holiday weekend, "but we can't reprint the whole menu," said Kevin.

He added that a steep rise in turkey prices over recent weeks will hit pubs, including the Fence Gate, which have taken Christmas bookings for set price menus.