29 September 2000

New blow for farmers as feed prices increase

FEED prices are set to rise by £4-5/t next month, with manufacturers no longer able to absorb increasing raw material and distribution costs, says a leading compounder.

Lancs-based Dugdale Nutrition says the strong US$ and increasing UK haulage rates, coupled with firmer imported raw materials, make it difficult to resist a price rise.

"Despite escalating transport costs, the agricultural climate has required us to show empathy with our customers and absorb the costs," says the companys Howard Blackburn. "Passing them on when raw material prices remained stable would have been difficult to justify. But that situation has now changed."

John Cessford of BOCM Pauls agrees that compound feed prices will have to rise if the cost of raw materials is to be covered.

"Soya has increased by about £30/t, and so has rapemeal," he says. "This equates to a rise of at least £7/t for some compound feeds depending on protein content. Increased prices are certainly on the way."

The situation is made worse by an inevitable hardening of demand for protein following below-average levels in much of the seasons silage.

"It is another pressure on the farmer in already difficult times," says Chris Rackham of ABN. "We have held back putting up prices in the past and it is the last thing we want to do at the moment. But now we have no alternative."

The news has been greeted with dismay by farmers, who fear margins will be squeezed even further. "It is a massive blow given the price we are getting for stock, and is exacerbated by rising haulage rates," says NFU livestock chairman Les Armstrong. "It is something we have no control over and we need government support and commitment, given the volatile situation that we have to operate in." &#42