Flour, pork, petfood prices set to rise as drought hits

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Flour, pork, petfood prices set to rise as drought hits

By Kylie Walker

SYDNEY, Dec 3 AAP - Drought-driven price hikes in pork, beef, flour products and petfoodare likely to drive up grocery bills in months to come, Australian producers warned today.

Bread has already become more expensive as wheat crops suffer from the lack of rain.

The Australian government's agricultural forecasting agency this week predicted thenation's summer crops would be devastated by drought, leaving producers with little choicebut to hike prices to cover costs.

Dried pet food and cake mixes were likely to become more expensive in the new year,said Green's Foods chief executive officer Peter McLoghlin.

"We moved our branded pet-food (higher) in September and we're looking at doing thatagain in the new year," he said.

Dry goods such as cereals and packet cake and pancake mixes were also in the processof being re-priced, Mr McLoghlin added.

"We can get the material we want, it's just a lot more expensive at the moment," he added

Goodman Fielder, with products such as bread, cereal, margarine and curry paste, wasnot currently planning to alter its prices, a spokeswoman said.

The food giant recently lifted its wholesale bread prices by five per cent and chilledspread prices by six per cent.

"We'll continue to assess the environment and keep a watching brief on the situation," she said.

Goodman Fielder last month warned its profits were likely to fall this year as risingwheat prices eat into earnings from its baking division, the producer of Wonder White,Helgas and Buttercup bread.

Its chilled spreads include the brands Meadow Lea, ETA, Gold'n Canola and Praise.

Meat products would become more pricey as producers were forced to pay more to feedtheir stock, said Nigel Smith, the managing director of Australia's largest pork producerQAF Meat Industries.

"The consumer, you and me, are going to have to be prepared that given the intensityof this drought, we're going to have to pay a bit more for our meat, our bread, our fruitand vegetables," Mr Smith told AAP.

"It's having a massive effect on the profitability of intensive animal production."

Some pork and other meat products have risen in price over the past two months, butMr Smith said that was a usual seasonal change in the lead-up to Christmas.

Cheap imports from Norway and Canada might keep pork prices dampened down, he added.

However, beef, as another industry heavily reliant on grain feeding, would be "heavilyaffected", he warned.

AAP kbw/tb

KEYWORD: CROPS PRICES