Mass slaughter of farm animals set to push food prices up 14%

Rupert Neate and Josephine Moulds in the Guardian (UK): The mass slaughter of millions of farm animals across the world is expected to push food prices to their highest ever levels. As well as hitting consumers' pockets, the predicted 14% jump in food prices will also dash the Bank of England's hopes of pushing inflation down to 2% by next year.

Farmers across the world have begun a mass slaughter of their pig and cattle herds because they cannot afford the cost of feed, which has soared following the worst US drought in living memory, according to a report published on Wednesday.

Experts at investment bank Rabobank warn that the mass "herd liquidation" will contribute to a 14% jump in the price of the average basket of food by next summer. On Tuesday, the Office of National Statistics (ONS) said lower food prices had help bring inflation down to 2.5% in August.

That brings it closer to the Bank's 2% target and should help consumers who have seen their spending power shrink as wages fail to match inflation. The Bank expects inflation to ease below the 2% target by early next year, but that could be scuppered by rising food, oil and commodity prices.

Rabobank said the slaughter of millions of pigs has already led to a 31% increase in the price of pork and the costs of other meats are also expected to soar as "US livestock herds are likely to be liquidated at an accelerating pace in the first half of 2013"....

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