Tony Bell: "Supermarkets must recognise the need for higher milk, pig and poultry meat prices."

Tony Bell, spokesman for the UK Agricultural Industries Confederations' Feed Executive, warns that livestock producers are facing unprecedented increases in feedstuff prices as manufacturers' raw material costs rise sharply. "EU and world cereal production was lower last year due to widespread drought," he explains. "This year, EU production was affected first by a drought in spring then severe wet weather in July, particularly in the UK. We are seeing unprecedented increases in wheat and barley prices, with wheat prices for harvest 2007 double those of a year ago."

The knock-on effects of the headlong rush to use arable crops to make bioethanol in the US means that more maize is being refined this way than is available for export. As well as maize prices doubling, the soya bean area has dropped as US farmers switch to growing the more lucrative maize, continues Mr Bell. Soya bean meal prices have risen in turn, as have other feed materials such as wheat feed, palm kernel and sunflower meal.

The situation is made worse by the EU's hard line on imports of feed ingredients that might contain GM material approved for use in many exporting countries but not in Europe....