Ration price hike hits farmers’ pockets again
CAUSE Growing population driving demand and putting pressure on supplies
Embattled farmers have been slapped with a price hike on rations for their livestock and merchants cannot rule out further increases.
That's the latest challenge facing farmers in the region. While stable prices for animals and poultry have given some cause for celebration, price hikes on inputs are eating away at their bottom line.
To get an expert insight into what is happening in the world supply of ingredients, the Celt spoke to Emmet Duffy, who works in the area of farm technical support with AW Ennis Mill in Virginia.
He says global demand and a growing scarcity of the supply of feed ingredients are driving the recent price increases.
“We are facing additional demand internationally, and mainly from China, for the raw materials used in rations – the likes of wheat, barley and maize in particular. Maize is hugely affected this year and Soya is also very expensive,” he said.
The demand in China has pushed maize prices to €260/t and that represents a hike of €70/t, up over 36% compared to this time last year.
Meanwhile, weanling and beef finishing rations have gone from €305/t to €320/t, depending on how many tonnes are purchased and the constituents in the particular rations.
With winter approaching, farmers seem destined to be further disadvantaged in terms of income, as the increases appear to continue unabated.
But the problem is “two-fold,” according to Mr Duffy.
“The second part of the problem, is that it is so weather dependent, that we almost need a world record harvest every year for stability and that will not be achievable from here on in,” he explained.
Mr Duffy detailed how on one side there is growing demand all the time for a particular product and the other side of the problem is that demand for harvests is putting serious pressure on supply.
He further highlighted that growing populations worldwide mean there are 80 million extra people in the world to be fed each year. “If they were all Vegan, 30 million tonnes of grain per year would be required to feed them,” elaborated Mr Duffy.
However, if they all preferred meat, it would be approaching 40 million tonnes per year.
The North American Continent is the largest producer of Maize.
“The demand is growing number one for animal feed and number two for human food. Maize is essentially where we derive our Corn Flakes and popcorn from. Weetabix comes from Wheat and mainly from England,” said Mr Duffy.
Though he explained the impact of Brexit has not been as bad as predicted 12 months ago. “There is a free flow so far of goods from the UK to Ireland,” observed Mr Duffy.
AW Ennis gets some raw materials like vitamins and minerals from Britain and wheat also comes from the UK. Whole grain barley will likely also be sourced from the UK this year, when supplies in Ireland run out.
Mr Duffy said there is greater demand for grain here than there is grain available. “We are one of the biggest users of the winter barley crop in the region and we purchase all the winter what we can locally, but there is nowhere near enough the supply we would need.”
Maize is sometimes brought in from France and the Ukraine. “The world price for Maize today is not quite double what it was last year, but it is heading in that direction,” he added.
From being out meeting farmers on the ground, Mr Duffy sees that each sector of farming is affected differently. “At the moment, pig and poultry farmers are coming under severe pressure because the prices they receive are static or falling, but their costs are rising. They don’t have a choice – they have to feed the pigs and poultry concentrates. This is starting to impact on their profitability,” he said.
Some are in a loss-making situation at present, while others are doing well to break even.
“Beef farmers would have seen the greatest rise in their prices in years, but it is being completely off set by the growing costs of rations, fuel and materials like timber and steel,” noted Mr Duffy.
AW Ennis make rations for cattle, sheep, pigs and poultry and they supply all over Ireland, both North and South.