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Feeding Stuffs

Volume 930: debated on Thursday 21 April 1977

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asked the Minister of Agriculture, Fisheries and Food by what percentage his Department estimates that feed costs for (a) pigs and (b) cattle in Great Britain would increase for each 1 per cent. reduction in the gap between the current value of the green pound and the current sterling exchange rate; and how these estimates are made.

A 1 per cent. devaluation of the green pound would raise CAP support prices in sterling terms by fractionally more than 1 per cent. The effect that this would have on cereal prices depends on a number of factors, in particular the market situation and any change in the level and pattern of demand for feeding stuffs arising from the devaluation itself. As present United Kingdom market prices are considerably above the level of institutional prices it is likely that changes in the latter would not be fully reflected in the former. However, assuming that the change in support prices was fully reflected in market prices the effect would be to increase pig feed prices by 0·5 per cent. and cattle feed prices by 0·4 per cent. This calculation is based on the assumption that at the time of the devaluation compound prices were at their current levels and that the cereals content of pig and cattle feeds are 80 per cent. and 70 per cent respectively.