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Inflation 'to rocket' after mass animal slaughter

20 September 2012

The Guardian says the mass slaughter of millions of farm animals across the world is expected to push food prices to their highest ever levels. The article quotes investment bank Rabobank warning that the mass "herd liquidation" will contribute to a 14% jump in the price of the average basket of food by next summer.

Sky News reported that the worst drought in the US for almost a century, combined with droughts in South America and Russia, have hit the production of crops used in animal feed - such as corn and soybeans - especially hard.

''As a result farmers have begun slaughtering more pigs and cattle, temporarily increasing the meat supply - but causing a steep rise in the price of meat in the long-term as production slows,'' said Sky News.

"Farmers producing meat are simply not making enough money at the moment because of the high cost of feed," Nick Higgins, commodity analyst at Rabobank, told Sky News.

"As a result they will reduce their stock - both by slaughtering more animals and by not replacing them."

The "mass liquidation" of animals - which Rabobank said will pick up pace in the beginning of 2013 - will contribute to food prices hitting new highs.

The report from Sky said the cost of pork is expected to rise at the fastest pace - by 31% by the end of June next year - while beef costs could increase by up to 8%.


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