Cattle and sheep rations are facing significant price increases from April as key straights used to formulate animal feed have rocketed in price over the past week.

Feed merchants indicate that cattle rations will have to increase in price to reflect the upward trend in spot prices.

Estimates point to rises of £10/t to £15/t on general purpose beef and dairy rations.

Barley prices have increased by as much as £12/t and merchants report that newly purchased stocks will be selling closer to £180/t.

This would put the cost of rolled barley to at least £190/t for farmers, which is more expensive than maize, which can be bought and delivered for £188/t this week.

Soya prices have also spiked in the past week, and are now costing merchants as much as £355/t to purchase. This would correspond to a £365/t cost for farmers.

By-products such as maize gluten have risen and are now at £200/t, with sugar beet pulp rising to £185/t, soya hulls rising to £180/t and distillers to £210/t.

The outlined prices are spot market prices, and merchants indicate at least £10/t to £15/t needs to be added on top of this for handling and transport charges.

Such is the demand for these straights across Europe that merchants are only being issued with a spot price on application to purchase the products.

News of higher feed prices will not be welcomed by farmers who have already seen £5/t to £10/t added to ration prices since the start of the year due to the disruption in supply of minerals. High maize (40%) beef finishing rations are currently priced around £200/t to £210/t with a 16% growing ration around £10/t more.

Dairy rations are £230/t to £240/t depending on protein levels, with 18% sheep rations at £230/t.

Cover

Feed merchants indicate that they are normally well covered for rising spot market prices by forward buying set quantities on monthly contracts.

However, feed mills have been working to capacity throughout the winter period due to limited fodder supplies, and merchants have been using higher quantities of key feed ingredients than they had forward purchased.

Therefore, they are having to repeatedly purchase additional straights on the spot market to fill order books.

But with prices spiking in the past week, feed merchants state they are no longer able to absorb the higher prices.

Supply

Issues with supply and increased demand are believed to be the main reason behind the price increases. Sales of animal feed across the EU have been significantly higher this winter.

The supply of soya hulls, gluten and distillers is extremely limited, which is inflating costs and the short-term forecast is unlikely to see any reverse to the upward price trend.

Estimates are that merchants could have as little as 20% of their required feeds purchased on forward contract for the summer months, which will leave them exposed to spot market prices in the months ahead.