October 2, 2008


High commodity prices have differing impact on various livestock sectors


Rising commodity prices have had a salient impact on the global aquaculture and livestock farming sectors over the last two years, Rabobank concludes in a new multifaceted report.


Of the six sub-sectors investigated, salmon, the most carnivorous of all the species studied, was the least affected protein.


Apart from salmon, the investigation explored the beef, pork and poultry industries along with vannavmei shrimp and pangasius (catfish) sub-sectors.


Prices in the European poultry sector are high while supply is on the rise due to recovering demand. Moreover, thanks to its low feed conversion rates, poultry is one of the most competitively priced animal proteins available, a notable advantage in the period of falling consumer confidence.


Also, Gorjan Nikolik of Rabobank's Food & Agribusiness Research and Advisory (FAR) who co-authored the report said farmed norwegian salmon's ability to evade the impact of commodity prices can be attributable to a factors such as gains made by feed formula change as well as operational efficiencies made by the industry. Such measures have kept overall salmon cost stable.


Apart from commodity prices on the cost of production, other factors which sets the aquaculture industry apart include animal diseases, energy costs, labour, land costs, credit availability, legislation changes, weather and consolidation.


The report takes a holistic approach in analysing each sector, exploring the impact of commodities in combination with other factors specific in each industry including disease outbreaks, legislation changes and technological developments.


Two other different proteins, pork and pangasius have correspondingly been affected by the rise in commodity prices because of their exposure to high feed costs, which drives up cost functions more than any other farmed proteins.


The report says the European pork farming sector and Vietnamese pangasius farming have notably endured growing cost increases from high commodity prices.

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