29 January 1999

Push for pig feed contracts

AGREEING forward contracts for pig feed could protect producers from the risk of higher feed costs which may rise in line with market prices, warn consultants.

"Future cereal markets are on the up and protein prices are as vulnerable as ever," says Signets Derek Wells. A forward buying feed contract could bring stability to pig business recovery by setting the main production cost – a development which many bank managers would welcome, he adds.

Glos-based consultant Malcolm Black agrees. But setting out what you require in terms of feed quality – energy, protein and ingredients – is critical to ensure you get good value for money."

Shop around for best value rather than lowest price for the specified diet. "A saving of £5/t can look attractive, but if the merchant has cut corners on feed quality, rations wont perform," adds Mr Black.

Other contract details must be discussed. For home-mixers with limited storage, availability and size of deliveries should be set out. Also, details of credit terms should be established, warn consultants.

"Some suppliers will be against setting contracts as many have been broken in recent months," adds Mr Wells. As a result, expect to give proof of credit worthiness, particularly when dealing with a new supplier. &#42