07 May 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 May 2015
ASSISTANT MANAGER
Develop your skills by preparing and serving a great range of delicious grills, spit roasts, farm assured chicken and fish......

24 April 2015
Lecturer in Agriculture with Business - York
Lecturer in Agriculture with Business. Due to our rapid expansion and significant growth in student numbers, the College has ...

2 May 2015
Class C Driver
As a professional driver you are an ambassador for apetito and will be delivering our finished frozen food product to Care Ho...

23 April 2015
Senior Agriculture Advisor – DFID Investments in Forests and Sustainable Land Use Programme
S/he will have a crucial role in achieving the programme’s result towards enabling conditions in deforestation-free agricultu...

6 May 2015
Lecturer/Senior Lecturer in the Built Environment
Management, agriculture, business and management. Lecturer/Senior Lecturer in the Built Environment....



Top stories you may have missed
10 April 2015 | Agri Safety

The permanent eradication of Bovine Viral Diarrhoea [BVD] in Scottish cattl...


10 April 2015 | Dairy

The abolition of milk quotas in Europe on 1st April has resulted in a numbe...


10 April 2015 | Cattle

The top 14 milk producing countries in Europe will increase their productio...


10 April 2015 | News

Matt Ware is the NFU's head of government and parliamentary affairs, based ...


10 April 2015 | Arable

There is a 'desperate need' to improve farmgate returns given low incomes a...


9 April 2015 | Arable

Rapid stem extension, after a slow start to spring, is likely to create spl...


9 April 2015 | Finance

The time has come for landlords to expect to see reductions in farm rents, ...


8 April 2015 | Cattle

Cogent’s reputation as a source of the highest calibre sires has been enhan...


8 April 2015 | Arable

The spread of exotic and aggressive strains of a plant fungus is presenting...


7 April 2015 | Animal Health

The FSA’s new Food Crime Unit wants the industry to share information, some...