Compounders in rationalisation rumours

The difficult April and May have effectively cleared the surplus of barley and wheat that was clogging up stores - especially in the South East.

But it's understood that the compounding industry is coming under increasing pressure as its most credit worthy farmer customers swing increasingly to home compounding on the pig side and to home mixing with Keenan feeders and their equivalents on the bovine side.

Part of the difficulty facing the industry is the increasing cost of labour, transport and regulation.

With static or falling raw material prices an increasing proportion of the final price of the product is taken up with covering these associate costs rather than providing a feedstuff for farmers.

The industry is awash with rumours of rationalisation and structural changes. One of the biggest players is the US firm's ADM Irish operations Southern Milling and Paul and Vincent. These comprise the Mills at Killmallock, Cork and Edgeworthstown. The Edgeworthstown plant operates under the Paul and Vincent brand and is one of the biggest mills in the country.

However there is no point in trying to get a grip on any of the Irish operations of the US giant. The individual companies are exempt from the obligation to file accounts as they are part of ADM International Ltd. with its registered office in Kent.

The overall group had a turnover of £682 million pounds sterling. The Irish operations excluding the grain trader Arkady which they also own, have it is reckoned, had a turnover of less than £100m.

The firm refused to make any comment on the current speculation.