Cost of price hikes hits farmers hard

Livestock farmers face soaring feed costs this winter as wheat prices reach highs not seen since the mid-1990s.

Yields across Europe have been hit by this year’s turbulent weather – both flood and drought – and ex-farm feed wheat values have now hit £145/t in some areas. Some livestock feed manufacturers reckon these prices could add up to £40/t to farmers’ feed costs.

Roger Jones, senior trader at KW Alternative Feeds, said August prices had revealed the first signs of further rises to come. “Compounds are £12-£15/t up on July and further rises are expected in September and October.”

BOCM Pauls’ Tony Bell said feed manufacturers’ raw materials costs had risen across the board. “With wheat and barley about £70/t higher than last year, this alone means a typical pig and poultry compound feed will be about £35/t dearer before other raw materials increases are taken into account.”

NFU livestock board chairman Thomas Binns said there was real concern that feed prices seemed to be “rocketing away” and fears were growing that straights and compound prices would continue to rise.

“We probably haven’t seen the full effect of this yet, as compounders will still be using forward-bought stocks. But there is great resistance in the supply chain to passing on these costs and it seems likely livestock producers will have to take this on the chin.”

The knock-on effects would be felt across the sector, he warned. “If beef finishers cannot recover their additional costs from the marketplace this may be reflected in the price they are prepared to pay for store cattle.”

Independent consultant Peter Crichton said pig producers were reeling under a double blow of rising feed and energy costs. “Feed prices have risen very sharply in the last four-to-six weeks. Pig producers are facing a 25% increase. When all feed price rises have fed through to production systems, they will add about 24-26p/kg deadweight for a bacon pig. Energy and operating costs are also up.”


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