Indonesia's cattle feed prices surge on higher input costs

Cattle feed prices in Indonesia have lifted after prices of corn and soy increased in the international market.

FX Sudirman, chairman of the Indonesian Feed Producers Association, said cattle feed prices have increased as 50% of cattle feed raw materials was corn.

However, he noted that the increase will be small and would not last long. Broiler feed is expected to increase by only IDR100 (US$0.01) to IDR4,600 (US$0.5), and the price rises are seen to last until harvest time.

Sudirman said the feed producers had been trying to substitute other materials for corn, but the prices of the alternative raw materials were more expensive.

He said corn is the best option and if the government fails to meet the need for corn, imports will increase and the industry will be dependent on the global price. But global corn price may soar due to the huge need from the bio-ethanol industry in the US.

There are no signs of downward trend in global corn prices, Sudirman said.

Corn import for 2009 for cattle feed reached 400,000 tonnes. Indonesia needs 5.5 million tonnes. Sudirman said they will import more this year since the government does not regulate corn planting to meet domestic needs.

He estimated that the cattle feed industry will grow 8% this year.