Sunday 07 October 2012
Animal feed merchants playing the market
Millers and feed compounders are buying ingredients "hand to mouth" due to shortages, said James Nolan of R&H Hall, at the Teagasc National Tillage Crops Forum.
He predicted native Irish grain production will fall 17% compared to 2011, from 2.4m tonnes to 2.03m tonnes, with the slump ranging from 21% in wheat to 14% in barley.
The feed grain market has also been hit by factors such as drought devastation of the US maize crop, drought damage in North and South America to oilseed crops, and currency movements.
With a record low wheat harvest in Russia. the European Feed Manufacturers’ Federation (Fefac) said consumers must pay more for foods. There were limitations to manufacturers absorbing raw material price shocks to reduce pressure on livestock farmers.
The only way for livestock producers to maintain economic viability is to transmit the upward cost pressure to downstream market partners and to final consumers, according to Fefac, as it urged EU decision-makers and G20 partners to keep the markets for agricultural raw materials open.
The feed manufacturers urged the European Commission to activate crisis management tools and take rapid market management measures. According to Fefac, the GM approval policy is preventing EU access to corn gluten feed and corn distillers with solubles — the only alternative sources available for vegetable proteins which are in short supply globally this year.
In the longer run, the EU needs to raise the attractiveness of growing more vegetable proteins in the EU, possibly on the ecological focus areas proposed in the new CAP, said Fefac sources.
They said market management tools for global shortages due to crop failures outside of the EU do not exist, and should be discussed in the CAP negotiations, along with price risk management tools for livestock farmers and processors, such as futures markets for products, which are not functional in the EU.
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