Farmers are facing another hike in compound feed prices this month, with the cost of dairy and beef rations rising by a further €15/t to €20/t.

And feed importers have warned that further increases could be in the pipeline as yield forecasts for the South American soya crop have been slashed due to severe drought conditions across Brazil, Paraguay and Argentina.

Co-ops and feed compounders have flagged the increases to farmers since the new year, with most putting €15/t to €20/t on the cost of coarse rations.

The latest hike means that beef farmers are now being charged €340/t to €355/t (bulk delivered) for finisher rations.

Some finishers who fixed prices last autumn have been insulated from the increases

There are some lower-spec feeds available for around €330/t, but, equally, the cost of what merchants describe as “premium rations” have moved up to between €360/t and €365/t.

Some finishers who fixed prices last autumn have been insulated from the increases. However, the latest hikes mean beef rations are now €80/t to €90/t dearer than in spring 2021 for most farmers, when standard beef finisher mixes were generally trading at €250/t to €260/t.

Daily rations

Dairy rations have increased by a similar amount. A ration at 16% protein is now €345/t to €350/t, with 18% mixes on €370/t to €375/t.

The higher feed costs will eat into the incomes of beef finishers.

It is estimated that the hike in ration charges will cost farmers finishing steers an additional 23c/kg or over €90 on a 400kg steer.

Philip Lynch, a trader with R&H Hall, attributed the price increases to the severe drought in South America which has resulted in soya costs surging by €80/t to €100/t since November. Prices for other proteins, such as corn gluten, distillers and rape meal, have hardened by €40/t to €50/t.

He said these difficulties have been exacerbated by “record high” freight charges which have added €30/t to €40/t on to the cost of ingredients; and reduced global grain supplies from the 2021 harvest, which has pushed wheat and barley prices to €300/t.

Pointing out that yields from the South American soya crop are likely to be 14m to 15m tonnes, or around 9% to 10%, back on forecast levels, Lynch warned that it was difficult to see a “reprieve” on feed costs until this year’s northern hemisphere harvest.