Feed prices a pain

Poultry and egg producers are feeling the sting of rising grain prices, according to the National Australia Bank.

In its latest Rural Commodities Wrap, the bank said rising costs were predicted to keep consumption at 840,000 tonnes in 2010-11 and increase the price of poultry meat by 3.5 per cent.

However, the report was compiled before recent rain caused grain prices to fall.

NAB's agribusiness general manager Khan Horne said the price of feed grain was 16.6 per cent higher than the same time last year and unlikely to ease significantly until at least late next year.

Mr Horne said feed costs accounted for about 60 per cent of total input costs for chicken meat producers.

He said the large movements in global grain markets were likely to have a significant impact on production.

"Over the near term, the rising costs are likely to be absorbed by producers," he said.

"However, as prices remain at elevated levels, it is a question of how quickly these costs can be passed on to consumers.

"Similarly, the egg industry is facing higher costs this year and NAB expects production to be down 2 per cent in 2010-11."

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