Commenting after meeting the Northern Ireland Grain Trade Association she said, "As a result of low farm gate prices and one of the wettest summers on record many farmers are facing an unenviable situation. The wet summer impacted upon grass growth and the ability to make silage and indeed silage of good quality. This in turn has meant an increase in compound feed use, with many merchants experiencing winter demand in the month of August. Unfortunately this causes a number of problems; extra production costs, carrying extra credit into the winter all on the back of inadequate farm gate prices.
The price of meal has also spiralled over the last year driving input costs to all time highs. For example between September 2011 and 2012 the cost of hipro soya has increased by 60%, corn distiller 50% and wheat by some 15%. NIGTA equate these increases in feed material costs for a typical ration to have risen by some £60/t since January 2012, an increase of about 30% on most feeds. To put this in context for Northern Ireland two million tonnes is the annual animal feed consumption, meaning that is some £120 million extra cost to Northern Ireland farmers and an extra £25 million extra credit to be carried by the grain trade.
"In relation to production costs the effect is even more pronounced with an average increase of 26p/kg deadweight on production costs for pigs, increase of 40p/kg on an intensive beef animal, a 2.5p/litre increase for milk from the average dairy cow and for the poultry sector an increase of 25 - 30p/bird on a boiler chicken and 16p to a dozen of eggs. As we all know this price increase has not been reflected in the market and if the market does not respond quickly it is more than likely farmers will reduce or leave the sector. This is a real possibility; the pig sector has already taken steps to reduce or de-stock. The problem is the market will not experience shortage until next year which for many will be too late. She said grain prices have increased due to the drought in the USA, speculators investing in feed commodities and the rising demand for fuel and bio fuels rising meaning less land available for feed crops.