Upward feed import trend threatens native producers and product

There is a growing awareness of the crisis in the grain and animal feed businesses. Many in the feed business bought grain stocks that were either more expensive than the market could subsequently afford or they bought stocks that have subsequently not been used and now occupy storage space that is or will be needed for something else.

Some farmers are caught in these same dilemmas as they own grain that has decreased in value since harvest and now they have difficulty selling grain at any price.

This is because the feed mills have existing stocks, much of which was imported, that they need to move first.

These things together mean there are growing concerns about the possibility of a large native grain carryover, with fears for storage space for next year’s crop at both grower and merchant level.

While the level of imports may be an issue for the integrity of the word “Irish”, we must acknowledge that the anticipated tight grain availability last harvest

Imported feeds form part of this problem but it would be wrong to suggest they are the only problem.

While the level of imports may be an issue for the integrity of the word “Irish”, we must acknowledge that the anticipated tight grain availability last harvest which gave rise to the strong prices did not materialise as the global maize harvest proved to be much larger than had been anticipated.

The result was that maize became very plentiful, prices lowered and the recently purchased native crop waited in the hope that the price swing would reverse.

It did not and feed mills purchased huge quantities of maize and other imported feedstuffs.

Getting numbers to quantify this rise in feed imports is not an easy task. Figure 1 shows the trend in a list of 27 designated animal feed ingredients.

This list shows an increasing trend in import levels for these specific feeds, probably since the mid-2000s. It contains many protein sources as well as carbohydrate sources.

In terms of these designated imported animal feeds, there were an additional 1m tonnes imported in 2018 versus 2017

It also includes fibre feeds. When the main protein products imported are stripped out the shape of this curve might be described as relatively flat, with the exception of 2018 when total feed demand was exceptionally high. It seems like an additional 300,000t of protein products were imported that year.

In terms of these designated imported animal feeds, there were an additional 1m tonnes imported in 2018 versus 2017.

This may have been exceptional for 2018 but the trend is still upwards over the period, with 2Mt of these products back in 2000.

The big individual elements of these imports with more then 200,000t in 2018 included animal feed (almost 800,000t), brewers or distillers products (588,000t), soya bean meal (585,000t), vegetable residues and by-products (575,000t), beet pulp (380,000t), wheat bran (325,700t), rape cake (257,000t) and palm kernel (206,000t).

It is also possible that some of the product listed as imported may have been exported again into Northern Ireland, so it is very difficult to be absolute with any of these numbers.

Imports of cereal grains

Notable absentees from the list of designated feeds described above are the cereals.

These are not included among the feeds because products such as maize or barley could be destined for the malting or distilling industries or they could also arrive for export.

It is interesting to note from these figures that we now import around 200,000t of flour

However, the figures for maize, wheat and barley used here are stated net of exports so these CSO figures should represent the amount that stayed in the country in those years.

It is interesting to note from these figures that we now import around 200,000t of flour.

Whether or not we can grow this in Ireland is one question, but a more relevant one for the powers that be is can we make a healthier brown bread from the type of wheat which we can grow here?

The grains list contained products such as durum wheat, maize seed, flours, malt and some other small products that are excluded from these calculations.

It is possible that some of the barley is for malting and likely that over 100,000t of the maize is being used for distilling.

Excluding these possible uses, we have been importing more than 1Mt of cereals in recent years and over 2.5Mt in 2018, a year when the native harvest was estimated at 1.8Mt max.

Figure 2 shows impact of adding the cereals to the feeds already mentioned.

Maize is by far the biggest single product, being 1.1Mt in 2017 and over 1.5Mt in 2018.

Some of this is the maize that is now in store, as these import trends extended into 2019. But this is certainly the product that had displaced native grain in rations over the past six to eight months in particular.

The trend is definitely upwards for imports and, with the cereal acreage declining, our ability to protect the word “Irish” in our exports is weakening.

There can be no doubt but that Ireland’s livestock industry needs imported feeds

If we have over 6Mt of feed imports plus a further 2Mt (normally) of native grains, this must challenge the authenticity of grass-fed, even for those who try to stand up the claim.

There can be no doubt but that Ireland’s livestock industry needs imported feeds.

We will remain under pressure to produce all our required protein, even for the ruminant sector. If we take 2017 as a somewhat normal year for feed demand, we have over 4.5Mt of imports plus over 2Mt of native.

While not all of this will be sold as formulated ration, it is part of the feeding system that produces our livestock.

And as the ratio becomes more askew in favour of imports, so does our ability to defend concepts such a Origin Green, traceability, Guaranteed Irish etc.

Maize is big

There is little doubt but that maize took over the grain market since last harvest. This does not help native produce but the fact that maize imports were bigger than the amount of native grain in the feed system is significant.

Does the agricultural industry, livestock farmers included, believe that the only purpose for tillage is to produce straw? Well there would be little point in being in the grain business if there is not a real, genuine and acknowledged market for our cereals.

Figure 3 points to the significance of maize in the imported feed sector.

While some of these imports may go to distilling, the vast majority of it is destined for the feed market. And this year it may be singularly responsible for some stores being full with grain before next harvest.

Impacts on the sector

One other real issue for the sector is the risk that merchant credit may be limited where grain in store is tying up the credit availability to that business.

Where a merchant has to carry this debt because he/she cannot liquidate the stock, it may not be possible to offer the usual annual credit facilities to farmers.

If this situation was to prove widespread it could seriously limit the ability of growers to grow quality crops in 2019.

Space is one issue but an inability to fully clear a store limits one’s ability to fully clean and disinfect it for the coming season

The other real fear currently is the inability to sell grain out of store to make room for the next crop.

Space is one issue but an inability to fully clear a store limits one’s ability to fully clean and disinfect it for the coming season, thus potentially putting the next crop at risk from pest attack.

These are all real issues in the sector currently. But perhaps the biggest one is the devaluation in grain that has taken place since harvest.

If we say €200/t green at harvest we can call this €230/t dry for wheat and barley. Today, barley will have great difficulty fetching €180/t, a value drop of €50/t for those who bought it at harvest.

The drop in wheat price is about half that. Apportioning this difference across about 1Mt represents about a €40m loss to the sector in the past few months.

This will affect the ability of growers to purchase new equipment but it may also affect the ability and willingness of grain buyers to offer attractive prices to growers for the coming harvest.