By FWi staff
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, claims a leading compounder.
Lancashire-based Dugdale Nutrition says the strong US Dollar and increasing UK haulage rates, coupled with firmer imported raw materials, will make it difficult to resist a price rise.
“Despite escalating transport costs, the agricultural climate has required the industry to show empathy with its customers and absorb the costs,” said the companys Howard Blackburn.
“Passing them on when raw-material prices remained stable would have been difficult to justify. The situation has now changed.”
John Cessford of BOCM Pauls agrees that compound feed prices are going to have to increase if the cost of raw materials is to be covered.
“Soya has increased by about 30/t, and so has rapemeal.
“This equates to a rise of at least 7/t for some compound feeds depending on protein content,” says Mr. Cessford.
“Increased prices are certainly on the way.”
The situation is worsened because of 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 have to do at the moment. But now we have no alternative.”
Farmers will see margins disappear even further, adds Les Armstrong, NFU livestock chairman.
“It is a massive blow given the price we are getting for stock, and is exacerbated by rising haulage rates.
“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.”