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Concerns over the impact of high energy prices in Britain reached a new level on Friday when the country’s meat industry warned that supplies of chicken, beef and pork could be affected.
The British Meat Processors Association said the recent closure of fertilizer factories in Britain and elsewhere in Europe due to soaring prices for natural gas threatens to create shortages of carbon dioxide, which is widely used in the industrial food sector.
A spokesperson for the meat processors said carbon dioxide is used to stun animals like pigs and chickens before they are slaughtered, under regulations to protect animal welfare. The gas is also injected into meat packaging to extend shelf life in supermarkets.
The group said in a statement that after current stocks of carbon dioxide were depleted – it estimated there were less than 14 days left – some companies would have to “stop taking animals and shut down production lines.”
The association added that production problems in the pig industry could force farmers to slaughter their animals soon. Food and other retailers in Britain have been complaining for weeks that a shortage of truck drivers, caused among other things by Brexit, was cutting supplies.
Sudden concerns about the food supply illustrate how problems in one industry – in this case, record high natural gas prices – can quickly spill over into others in a tightly interconnected economy like Britain’s. Analysts attribute the high gas prices to growing demand from China and low storage levels in Europe as winter approaches.
High gas prices have already skyrocketed electricity prices in Britain, Spain and elsewhere in Europe, putting pressure on consumers and industry. A fire that caused a major blackout on an electric cable connecting Britain and France on Wednesday put additional pressure on electricity prices.
Fertilizer manufacturers use massive volumes of natural gas to make ammonia, producing quantities of carbon dioxide as a by-product. The gas is captured and sold to food companies and other industries to, among other things, add sparkle to soft drinks.
The first indication that the flow of carbon dioxide could be reduced came on Wednesday when U.S. fertilizer maker CF Industries said it was responding to the recent hike in natural gas prices by shutting down two large factories in northern L ‘England, to Ince and Billingham.
Yara, a major Norwegian fertilizer maker, said on Friday it was also suspending production of around 40 percent of its European capacity.
“Record prices for natural gas in Europe are impacting ammonia production margins,” Yara said in a statement.
According to the Meat Processors Association, the plant closures affected factories Britain could have turned to for emergency supplies.
The group said the carbon dioxide market is unregulated and therefore there is little information on how much gas is available. He called on the British government to intercede “to prevent this from happening again”.
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