Demand for feed is on the increase
The continued dry weather and poor growing conditions have created an unprecedented demand for feed materials to compensate for the shortage of grass for grazing livestock.
Northern Ireland farmers are experiencing up to 20% reduction in grass yields in some areas and with the peak growth months already past, the potential for a late burst of growth to replenish forage stocks reduces as every day goes by. The situation is even worse in the south, and particularly the south west of Ireland where the highest density of dairy herds are located.
This is traditionally a region where production is highly grass based – but when the grass fails producers have to look to purchased feeds to maintain production and herd health. Demand for feed in this region is higher than at any stage of the winter, with local millers overwhelmed with orders for compounds and high fibre materials to extend the available forage.
According to a spokesman for the Northern Ireland Grain Trade Association (NIGTA), feed importers and distributors throughout Ireland are struggling to secure the materials needed to maintain supplies to farmers.
He added: “With our dependence on the global marketplace for feed materials there is a significant lead in time involved in securing material at the origin, transporting it to port and then the shipping time, (up to five weeks for the palm products from Malaysia and Indonesia) before it is landed in Ireland.
“Securing tonnages of these materials is complicated by the fact that most are by-products of food production or energy generation processes and the volumes available are dependent on the demand for the primary product. Soya Hulls, Citrus pulp and Palm Kernel are examples of valuable feed materials which have a limited availability and a seasonal supply pattern.”
Ireland is not the only region experiencing the extremely dry conditions with many parts of Europe and the Black Sea region also affected. This is reducing crop yields with Russia’s estimate of a 20 million tonne reduction in the wheat crop sending prices surging upwards. Barley is also trading very strongly leaving maize as the best value cereal for livestock rations.
Further afield, lack of moisture has also impacted the soybean harvest in Argentina, the main source of soymeal and hulls for the Irish market.
Weather is not the only factor in the current volatility in raw material markets. Trade wars appear to be inevitable – with President Trump taking on Canada, the EU and the Chinese. China accounts for 70% of world trade in soybeans and with the US supplying most of the 100+ million tonnes imported this spat has far reaching implications for world trade - including how feed materials are imported into Ireland
The influence of currency, and a further weakening of sterling as recent developments within the UK government regarding Brexit have left markets with more uncertainty and an expectation that this, with increased volatility, will continue until the end of the year.