Farm Ireland
Independent.ie

Friday 20 October 2017

Millers flag further €40/t feed price hike

Producers warned to expect pinch after surge in ingredient costs

Caitriona Murphy

Caitriona Murphy

Compound feed prices could rise by a further €40/t in the coming months as feed ingredient prices continue to spiral upwards, suppliers have warned.

Although farmers have already shouldered a €20/t hike on many rations this month, feed manufacturers have predicted further increases between now and the summer.

Compound feed prices for cattle rations have risen by approximately €60-65/t since this time last year, while pig rations have increased by up to €100/t in the same period.

Keenest prices for bulk deliveries of finisher beef rations have moved from around €185/t last January to €260/t currently. Standard 18pc dairy nuts have increased from €200-210/t 12 months ago to €260/t today, while more elaborate rations with supplements have reached more than €300/t.

IFA livestock chairman Michael Doran said the rising input costs of both feed and fertiliser had effectively soaked up any beef price increases.

"Beef price will need to drive on substantially to cover the increases in feed prices," he said.

The higher input costs equate to around 18-19c/kg in beef price and would require the average milk price this year to rise by at least 2.5-3c/l in order for dairy farmer margins to simply stand still, according to the IFA. Pig farmers' costs have also risen by 24-26c/kg in the past 12 months.

However, further increases are on the way, with one southern-based miller maintaining that the real pinch would be felt in May, June and July.

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"Over the next three or four months feed will increase by €40/t or more on today's prices," he maintained.

"That's fairly near guaranteed."

Escalating feed ingredient prices are behind the surge in compound feed costs, with raw materials up €100/t on last year.

Indeed, feed manufacturers maintain that farmers have been cushioned from the full effect of rising cereal and protein costs by forward buying.

"Barley last year cost €135/t but it's up at €230/t today. Soya was €270/t but it's now heading for €400/t and rape meal at €265/t is costing €100/t more," said another miller.

"This situation is not going to do anyone, the farmer or the miller, any good. It will kill the trade altogether," insisted another manufacturer.

Deirdre Webb, from the Irish Grain and Feed Association, said higher ingredient prices cost the feed industry €350m in the past year.

"We have to ask how agricultural commodities can rise by €100/t, with such serious implications for those of us at the bottom of the food chain, but yet the retailers can still retain their margins?" she said.

Teagasc nutrition specialist Siobhan Kavanagh advised farmers that early turnout would be crucial.

"All classes of stock should go out to grass as soon as possible and finished cattle should be slaughtered as soon as they are fit. Some lighter bulls could go out to grass for a while before being finished in the shed," she advised.

"Keep rations simple, avoid expensive extras, check the specification of your feed and remember that good quality ingredients and good husbandry will produce results," she said.

The Teagasc expert warned that farmers needed to do their figures before getting carried away and spending too much on forward store cattle.

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