Most livestock rations from 1 December will incur a £10/t price increase as feed merchants react to the rise in spot markets for grain and proteins.
Cereal prices have soared to unprecedented levels over the past week, with reports of rolled barley being delivered on farm from £280/t to £290/t.
It means rolled barley has risen by £50/t to £60/t since October 2021, and is £80/t to £100/t above the corresponding price last December.
However, maize meal has been holding relatively steady in recent weeks, with current price quotes putting bulk deliveries around £280/t on farm, up £55/t on the same month last year.
Soya is also relatively steady at £380 to £390/t for bulk orders, although soya hulls are extremely difficult to source with most merchants unable to quote a price.
Maize distillers is around £290/t, with maize gluten at similar levels.
Sugar beet pulp is typically £265 to £270/t but there are reports that the product is getting harder to get due to shipping delays.
Some merchants have also encountered delays when sourcing trace minerals. Again, this has resulted in rising costs that have to be passed on.
December’s price increase will see 16% general purpose cattle rations trading from £270 to £285/t depending on the ingredients and whether a blend or pellet. Dairy and intensive lamb finisher rations will cost from £300 to £320/t.
A key factor in rising feed prices is the level of forward cover merchants have had during the second half of this year. With the market unstable, most were forward buying short.
Those contracts are now close to expiring, leaving feed mills with little option but to lock in at higher prices.
Looking ahead to 2022, there is no sign of a downturn, with forward contract price lists for imported grain supplied from January to April indicating prices above £260/t.
Adding in transport, rolling and margin, this would likely see rolled barley being delivered on farm between £290/t and £300/t.
Sources in the trade suggest further ration price increases are likely for January, and again in March/April.