Energy shortage affecting U.K. swine industry

Meat processors are going to start running out of carbon dioxide this week, an industry group said.

An energy situation in the United Kingdom could affect its agriculture sector.

Rising gas prices forced CF Industries Holdings, a U.S.-based fertilizer manufacturer who makes carbon dioxide as a by-product, to shutter production at two U.K. locations.

Near the end of January, wholesale natural gas prices in the U.K. were around £46 (US$62) per therm (a measurement equal to 100,000 BTUs).

But as of Sept. 15, the price had climbed to £177 (US$241) per therm.

Without the facilities making carbon dioxide, the U.K.’s ag and food sectors could feel the effects of the shortages.

Meat processing plants, for example, use carbon dioxide in their processing operations. It’s also used in packaging to extend food shelf life and to help keep items frozen during delivery.

Already as a shortage looms, about 95,000 pigs are waiting for processing.

Without the capacity to process the pigs, farmers may have to make tough decisions.

“If this (carbon dioxide) shortage isn’t resolved very quickly, we will be a couple of weeks away from being forced to cull perfectly healthy pigs on farms…,” Zoe Davis, CEO of the National Pig Association, told ITV News.

A lack of a steady supply of carbon dioxide will also be reflected on grocery store shelves.

“If we lose (carbon dioxide) then we won’t be able to operate and the consequence will be those animals end up staying on the farm,” Nick Allen, CEO of the British Meat Processors Association, told Bloomberg. “In the worst-case scenario, if the (carbon dioxide) dries up, about four or five days after that the shelves will be empty of British pork and British poultry. It is that quick.”

It appears, however, that the British government is stepping in to ensure enough carbon dioxide is available for the industries which require it.

Reports out of Britain indicate Business Secretary Kwasi Kwarteng and Tony Will, president and CEO of CF Industries will make an announcement Tuesday.

The announcement is expected to be about the government providing financial support to restart production.

Ag industry groups are pleased with the prospect of this announcement and what it could mean for production and consumers.

“We don’t yet have the detail, but if production can restart an appropriate scale before the end of the week, this should be enough to ensure pig and poultry production can continue at close to normal,” Ian Wright, CEO of the Food and Drink Federation, told the Financial Times. “There will be some shortages, but these will not be as bad as previously feared.”

Farms.com

Tags: swine industry, U.K.