29 January 2015 | Online since 2003



World feed prices continue to pressure producers


Adverse weather conditions in many parts of the World have caused prices for wheat and soya to rise rapidly in recent weeks, putting severe pressure on many livestock enterprises in the UK.

Feed costs are typically the largest single expenditure items for livestock producers, accounting for approximately a third of production costs for dairy and intensive beef producers and around 60 per cent of costs in the poultry sector.

A number of weather events around the world, particularly drought in parts of North America, are driving supply side concerns.

The delayed harvest in the UK is also putting pressure on domestic supplies. Over the last two months, feed wheat has increased by nearly £40 per tonne and soya meal up nearly 50 per cent since the start of the year.

"The wet weather we have experienced in recent months has certainly affected the quality of our forage crops with farmers having to use every break in the rain to try to conserve grass" said NFU Deputy President and dairy producer Stephen James.


"But, with harvest delayed and dry matter content often lower than hoped, many of us will have to rely on purchasing more feed than we would have budgeted for this winter to maintain production levels. With our principal input cost increasing significantly and our concerns over milk price well documented, we face mounting pressures as we head in to what could be a long and arduous winter."

Free range egg producer and NFU poultry chair Clare Morgan said since two thirds of production costs were feed, it is clear that the recent spikes were putting severe pressure on producers.

"Unfortunately, we are aware of reports of downward pressure from retailers on egg prices at a time when our costs are soaring."

The pig industry is also struggling with producers urging consumers to buy British pork. The National Pig Association warned that up to 10% of producers could be at risk of leaving the industry.

Again, the largest concern is the cost of feed which has soared up 25% largely because of the harsh weather conditions in the US.

In its monthly agricultural supply/demand update the U.S. Department of Agriculture on August 10 again lowered the outlook for U.S. corn production, reflecting the continued deterioration of this year's crop due to the once-in-a-lifetime drought that affects most of the U.S. corn belt.

The report comes on the back of the UN Food and Agriculture Organisation’s Food Price Index, which showed global food prices rose by 6 per cent in July and news of drought in other major cereal growing regions including parts of Russia and India.

As grain rallies pushed prices to record levels last month, FAO economist Abdolreza Abbassian warned that panic over the effects of droughts, exacerbated by commodity speculation, would affect access to food for the world’s poorest people.

According to HGCA, high prices are already having an impact on demand forecasts with US feed demand for maize now forecast at 103.51Mt, 12.07Mt below last season. Maize demand from US ethanol producers is forecast at 114.3Mt, 12.7Mt below last season.

José Graziano da Silva, director-general of the FAO made the call earlier today, advising that a competing demand for the decimated US maize crop would put unsustainable pressure on maize prices and drastically limit availability. He said, "Much of the reduced crop will be claimed by biofuel production in line with US federal mandates, leaving even less for food and feed markets."

In Wales alone, there are 25,800 pigs compared to 67,800 in 2000. The number of breeding pigs has also halved from 8,900 to 4,500, a figure that Christine Jones, NFU county chairman, expects to see snowball in the near future.

But "poultry require specialist diets and, with no cost-effective replacement for soya in monogastric diets, our costs are heavily determined by world commodity markets" Claire Morgan continued.

“It is important that short-term supplier prices to farmers reflect the recent volatility and fundamental change in world commodity feed markets. In the longer term, the whole supply chain needs to work together on delivering supply relationships which take into account inflation in production costs,”

Download



Comments


No comments posted yet. Be the first to post a comment

To post comment without approval login or register

Display name

Please enter your name

Email (optional)
Comment

Please enter your comment

Post Comment

Your comment submitted successfully.Please wait for admin approval.

Some error on your process.Please try one more time.



Jobs


5 January 2015
Apprentice Kennel Assistant
Storeton Lodge Farm. We are the largest provider of post 16 learning on the Wirral and we pride ourselves in ensuring that yo...

21 January 2015
PIG STOCKPERSON
Contact Rob on 07976 564526 for an informal chat or apply to A J & R G Barber Ltd, Higher Corton Farm, Friar Waddon, Weym...

13 January 2015
Part-Time Grain Administratro - Maternity Cover
Agriculture knowledge is desirable but not essential to the role as full training will be given. This is an exciting and chal...

10 January 2015
Agricultural Solicitor - Oxford
Agricultural Agriculture Rural Farming Farms Solicitor Commercial Property Private Client Law Lawyer Legal Vacancies Jobs Vac...

5 January 2015
Farm Assistant/Ride Operator
Must have farm experience or is studying for or have a qualification in animal care/husbandry. Reliable and flexible person w...




Top stories you may have missed
12 November 2014 | Arable
GM crops 'good for farmers and the envir...

GM crops 'good for farmers and the envir...

GM crops are good for the economy and can reduce the amount of pesticides u...


6 November 2014 | Cattle
Smaller European markets drive beef expo...

Smaller European markets drive beef expo...

Demand from smaller European markets has helped drive strong growth for UK ...


6 November 2014 | Agri Safety
Lack of engineers a 'ticking time bomb' ...

Lack of engineers a 'ticking time bomb' ...

A lack of engineers, not enough people promoting the land-based industries ...


4 November 2014 | Bees and Beekeeping
Bee action plan due: Last chance for bee...

Bee action plan due: Last chance for bee...

Environment Secretary Elizabeth Truss is launching the National Pollinator ...


4 November 2014 | Arable
Experts welcome financial boost for youn...

Experts welcome financial boost for youn...

Agricultural specialists have welcomed a potential financial boost for youn...


3 November 2014 | News
Supermarket competition on prices 'risks...

Supermarket competition on prices 'risks...

As retailers continue to participate in a highly competitive race to the bo...


31 October 2014 | Arable
New Defra farm figures 'underline volati...

New Defra farm figures 'underline volati...

New farm business income data from Defra, which focus on income from March ...


30 October 2014 | Agri Safety
Agriculture remains one of UK's most dan...

Agriculture remains one of UK's most dan...

Agriculture has remained one of the industries in which workers are most li...


29 October 2014 | Finance
UK farmland prices see 'substantial grow...

UK farmland prices see 'substantial grow...

Prime arable land in the UK has seen a substantial year-on-year growth in p...


27 October 2014 | Arable
Satellites to help farmers pinpoint dise...

Satellites to help farmers pinpoint dise...

A new mobile app for farmers able to pinpoint and identify disease, pests a...