Flockmasters face higher feed prices
By James Garner
FEED prices look set to shift upwards into next year as cheaper protein stocks run out and more expensive replacement supplies are brought into mills.
Despite low cereal prices, the market is still protein driven, says ABNs raw material director, Chris Rackham. "Stocks of summer purchased rape seed meal and soya are running low into the new year."
By January, feed costs will rise as mills move from cheaper stocks into the more expensive replacement market. Mr Rackham points out that the rapeseed market has moved up £20/t since summer, which will come through into feed prices by January.
Many sheep producers are finding that compound feeds are more expensive than last year. This, he says, is because sheep feed is used during January to April which is next years trading and reflects rising protein prices.
UKASTAs director general, Jim Reed, adds that the genetically modified crops issue has confused the market, with many raw material buyers not investing in cheap soya over summer in case they were left with redundant supplies.
That means a lot of soya is being brought on spot, pointing to a volatile market, says Mr Reed. Another factor pushing up feed costs is farm assurance, which requires mills to be split between mono gastrics and ruminants.
"This means feed has to travel further, and, with the now defunct fuel escalator increasing fuel prices, haulage costs more," he says.
Facing rising prices, more producers – especially sheep and cattle farmers – are looking at straights, says SAC nutritionist Mitch Lewis. "Fewer are feeding compounds; some are looking at feeding their own grain or other straights, such as maize gluten."
Dr Lewis also believes some compound feed quality is suspect and he advises producers to check the list of ingredients on the label.
When low energy materials, such as oatfeed, are high on the list of ingredients producers should be wary, he says. Another way to assess compound quality is to see where high quality ingredients – wheat or dark grains – come on ingredient lists.
"If they are included at levels less than molasses, which is unlikely to be above 10%, it shows these ingredients will be making little significant contribution to the compound."
Home mixing offers a cheaper alternative when ingredients can be stored and labour is available to mix feed. But with margins so low, producers are willing to take more risks and are feeding straights such as maize gluten through pregnancy, says Dr Lewis.
Maize gluten can be fed at similar levels to compound feed, up to 1kg a day and 1.3kg a day for lactating ewes, but it must have minerals added to avoid any nutritional problems, he says.
For dairy producers, compound prices are similar to last year, says Axient senior nutritionist Diana Allen. But straights and blends offer cheaper prices.
"If you can use a blend through your parlour, this will save about £12/t compared with a compound."
Pig producers should consider changing their buying policy, says Signet consultant Derek Wells. Longer-term feed contracts may be a better option than the three- and six-month contracts many are using.
Mr Wells says the world soya situation may lead to rising prices, which UK pig producers could be vulnerable to, hence his reasons for buying forward. "Feed prices make up 60-65% of production costs. When you can fix these for a longer period you know what pig price is needed to break even." *
• Protein prices rising.
• More costly haulage.
• Sheep compound prices up.