November 04, 2003



Livestock Producers in UK Facing Increased Feed Costs

Arable farmers in UK may be celebrating the current booming grain prices, but livestock producers are being faced with ever-increasing feed costs.


Wheat prices are some 30 sterling pound/t higher than this time last year, and proteins like rapemeal and soyameal are also rocketing.


Compound values were at least 10 sterling pound/t higher for anyone fortunate enough to have bought forward said Ian Powell, business manager at the ADAS Dairy Group.


"Those who haven't bought forward are facing even bigger problems."


Mr Powell reckoned the higher feed values would add between 0.3p and 0.5p/litre to dairy production costs, depending on when farmers bought their feed. He said that it might even be more than what he estimated.


Chris Rackham, raw materials director at ABN, said it was a "ferociously bullish" market at the moment.


The main driving factors were this year's small EU grain crop and very poor US soyabean yields, caused by drought, he said.


Soyameal prices have jumped by more than 30 sterling pound/t ex-store in September, with rapemeal rising by 23-25 sterling pound/t.


Maize gluten had also gained 11-12 sterling pound/t over the same period, said Mr Rackham.


"Clearly with these sort of increases there are some further significant compound increases to come."