Surging natural gas prices could have a serious impact across the food supply chain from meat processors to supermarkets.
A shortage of carbon dioxide in particular is affecting food production after the UK’s biggest fertiliser producer, CF Industries, shut down two plants due price rises in the industry.
Carbon dioxide is a by-product of fertiliser production, reports the Grocer, and has a range of uses from stunning animals before slaughter, to cooling meat and packaging.
Government response needed
Both the British Poultry Council (BPC) and the British Meat Processors Association (BMPA) have warned about the severity of the situation. BMPA CEO Nick Allen called for a “strategic response from government”.
Wyke Farms managing director, Rich Clothier, said the cheese manufacturer has “been living hand to mouth” for the past two weeks, and said the shortages were having a particular impact on its export cheeses, which require longer shelf lives.
According to the Times, supermarkets are racing to secure supplies of carbon dioxide after government talks with CF Industries, which supplies 60% of the UK’s carbon dioxide, ended without a plan to restart production.
The head of one supermarket chain said: “Everyone is scrabbling round to secure supply and like in musical chairs someone will be left without a seat. Carbon dioxide is used everywhere.”
Ranjit Boparan, owner of 2 Sisters Food Group, the largest UK producer of chicken and owner of turkey processor Bernard Matthews, told the FT that “Christmas will be cancelled” unless the government steps in.
According to the government, the global shipping crisis is partly to be blamed for the shortage, with an increasing amount of liquid natural gas being transported on the seas.
International shipping has continued to be affected by pandemic-related logjams, soaring consumer demand and extortionate prices for freight.
Industry group Oil & Gas UK told the BBC that wholesale prices for gas had increased by 250% since January - with a 70% rise since August.
Energy companies struggling
Several energy suppliers are reportedly on the verge of going bust and the government is considering emergency state-backed loans to keep them in business.
Following a weekend of discussions with suppliers, business secretary Kwasi Kwarteng is set for more meetings with companies today.
According to the Guardian, he is working with other ministers to avert the knock-on effects of the gas crisis, including in the food and drink industry.
He sought to reassure the public that “security of supply was not a cause for immediate concern within the industry” and that the UK benefitted from a diverse range of gas supplies.