Feed price warning on grain market tension

A sharp rise in feed grain prices, sparked by political tensions in Ukraine, could start to filter through to dairy farmers’ ration costs.

“As Ukraine is a relatively low-price exporter of feed grain on to the world market and recent tensions have put a question mark over future exports, world wheat prices have risen noticeably for the first time since autumn 2013,” said a DairyCo report. Domestic feed wheat prices have risen by more than £11/t during the past month alone.

“Although the extent to which this will affect GB dairy farmers will depend on their feeding system, the tensions do show how GB dairy farmers continue to be affected by political situations across the globe.”

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However, electricity prices had fallen by nearly £5/MWh (8%) since December, to about £49/MWh, providing some relief to production costs, said the report. Electricity accounted for 15% of farmers’ total power and machinery costs, equivalent to 0.5p/litre on average. “Although electricity prices are at lows not seen since summer 2012, increased recent volatility means that being energy efficient is still crucial to reducing energy costs.”

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