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High compound feed cost hits pig farmers

amsterdam / reuters

Europe’s pig farmers are struggling to maintain production, caught between a slide in pork prices and a rise in the cost of protein-rich soymeal and rapemeal used in compound feed.

The price of soymeal has surged nearly 40 per cent this year. Along with rapemeal it is used as the main source of protein in compound feed.

“There is very strong demand for spot contracts which means that the industry is not well covered,” one trader said.

“Demand will remain strong as there is no alternative. You need your proteins.”

Droughts in South American key growing areas, along with strong demand from China, the world’s largest importer of soybeans, have boosted prices of soybeans and others across the oilseed sector.

At the same time, pig farming in Germany, the country’s largest livestock sector, is suffering as meat-processing companies bowed to pressure from retailers and accepted a five-cent price cut per kilo live animal weight.

“The significant fall is an affront to pig farmers who are currently struggling with the impact of ever-rising feed costs,” said Franz-Josef Moellers, vice-president of the German Farmers Association.

The double impact of high feed prices and falling pork prices was something which “pig farmers will not be able to survive for much longer,” he said.

Europe’s livestock sector has been in decline over the past few years as farmers suffered from high feed costs and the expenses associated with ensuring higher standards of animal care.

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