Business Farming

Thursday 2 October 2014

Concentrate feed facing €15/t hikes

Darragh McCullough and Caitriona Murphy

Published 05/12/2012 | 06:00

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Concentrate feed prices are set to increase by up to €15/t in the New Year, feed companies have warned.

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Higher raw material costs are being blamed for yet another hike in dairy and beef ration prices.

However, the high feed charges have not hit demand. Feed sales are racing ahead of normal due to poor fodder quality and a shortage of feed stocks on farms.

Spokesmen for both Liffey Mills and Brett Brothers indicated that dairy and beef ration prices will rise, with figures of an extra €5-15/t being mooted.

Ration prices have already increased by as much as €140/t in the past two years, to an average of €320/t for bulk beef ration delivered and €330-340/t for dairy rations.

Wheat prices hit a historic high of €280/t in the past week on the LIFFE, and while soyabean price has fallen in the past month, it remains close to €480/t.

Despite the high price of feed, atrocious weather conditions in the summer of 2012 have driven massive demand for rations.

Sales of beef meal are running 20-35pc higher than normal, while dairy ration sales are up by as much as 50pc in some areas of the country.

And there is little good news on the horizon for the first six months of 2013.

The current volatility in agri commodity prices looks set to continue into the new year, according to the latest report from Rabobank.

Grain and oilseed rape prices are expected to rise even further in the first six months of 2013 due to tight global supplies, according to the report.

The hope is that production will rebound in the second half of the year and reduce the pressure on prices.

The price of soya meal is forecast to drop most by the end of next year and it is hoped that record global plantings of wheat and maize could see prices of both of these commodities fall by over 20pc.

BEHIND

However, plantings are already one month behind schedule in Argentina due to unprecedented levels of rain, according to Dairygold's feed purchaser, Pat Flanagan.

"We're relying on a perfect harvest in 2013 to correct the global supply shortage, but it hasn't started very well," he said.

Mr Flanagan said that every feed commodity was in short supply and estimated that feed prices had increased by €50/t over the past 12 months.

"Since last May we've been expecting feed prices to come back but it just never happened.

"The EU lifted the ban on GM MIR162 maize three weeks ago but it was too little too late because when buyers went looking for this GM gluten in the US they were told it was already sold to other buyers in North Africa and Turkey."

Mr Flanagan estimated that Dairygold's feed volume sales were up by at least 20pc this year.

"Farmers had no choice – they're in dire straits," he said.

However, feed manufacturers have seen sales begin to taper off significantly as many farmers opt to slaughter beef animals and dry off cows rather than feed them on through the winter.

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