January 19, 2011
Irish millers to further increase compound feed prices
Continuous rise in feed ingredient prices could further push Ireland''s compound feed prices to EUR40/tonne (US$53.73) in the coming months, suppliers have warned.
Although farmers have already shouldered a EUR20/tonne (US$26.87) 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 EUR60-65/tonne (US$80.60-$87.32) since this time last year, while pig rations have increased by up to EUR100/tonne (US$134.34) in the same period.
Keenest prices for bulk deliveries of finisher beef rations have moved from around EUR185/tonne (US$248.52) last January to EUR260/tonne (US$349.27) currently. Standard 18pc dairy nuts have increased from EUR200-210/tonne (US$268.67-$282.11) 12 months ago to EUR260/tonne (US$349.27) today, while more elaborate rations with supplements have reached more than EUR300/tonne (US$403.01).
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.
"Over the next three or four months feed will increase by EUR40/tonne or more on today''s prices. That''s fairly near guaranteed," he maintained.
Escalating feed ingredient prices are behind the surge in compound feed costs, with raw materials up EUR100/tonne (US$134.34) 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 EUR135/tonne (US$181.35) but it''s up at EUR230/tonne (US$308.97) today. Soy was EUR270/tonne (US$362.71) but it''s now heading for EUR400/tonne (US$537.35) and rapeseed meal at EUR265/tonne (US$355.99) is costing EUR100/tonne (US$134.34) 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 EUR350 million (US$470.17 million) in the past year.
"We have to ask how agricultural commodities can rise by EUR100/tonne (US$134.34), 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. She warned that farmers needed to do their figures before getting carried away and spending too much on forward store cattle.