16 November 2001

European producers hope ks introduction will increase returns

By Mike Stones

farmers in Germany are hoping for higher prices next year as food companies exploit the introduction of the k on Jan 1.

"Food companies will probably use the early days of the k as an excuse to increase prices," said Wilhelm Voss, managing director of machinery company Krone. "Large-scale farmers hope they will benefit from some of those increases."

Farmers optimism is based on an estimated 15% rise in incomes this year, said Gerd Wiesendorfer, marketing director of manufacturers association VDMA. "A good cereal harvest, better prices for grain and rape, together with much improved pig and milk prices, have helped to offset the effects of BSE."

Even beef prices have recovered to 80% of their pre-BSE level in November last year, he added. "Only about 120 BSE cases reported were reported in Germany. But after dominating the news headlines for months earlier this year, the German media has now largely forgotten about BSE," said Mr Wiesendorfer.

Meanwhile, farmers are looking forward to the greater price transparency in machinery markets.

"Farmers should benefit from the manufacturers cost savings through lower bank charges and greater price discipline as the distorting effect of currency movements are removed from the European market," said Mr Voss.

Change… Krone chairman Bernard Krone (left) and Wilhelm Voss.