Compound feed will rise in price before the start of the new season

Feed prices have increased by an average of 24% since February 2020

The rise in prices for compound feeds and their components will not stop until the new agricultural year and the start of the harvest. Valery Afanasiev, President of the Union of Compound Feeders, spoke about this during the Russian MEAT & Feed Industry conference of Agroinvestor. He believes that before that time, prices will increase by another 5-7%. In total, according to him, from February 2020 to February 2021, the price of compound feed rose by an average of 24%, the cost of poultry feed increased the most - by 25%.

The cost of compound feed is 90% the cost of raw materials, Afanasyev recalled. According to him, most of the components have risen in price by about 20-25%. Thus, prices for feed grains increased by 24-25% over the year (February to February), while corn rose in price by almost 40%, wheat - by 25%, barley - by 3.5-5%, he compared. However, after numerous meetings and the introduction of EXPORT restrictions, a downward trend in prices nevertheless emerged: from the end of February to the beginning of March, the cost of feed grain decreased by 1-2 thousand rubles. per ton, however, at the end of last month, prices again began to gradually rise.

Valery Afanasiev, President of the Union of Compound Feeders

We analyzed ten plants, and saw that their profitability dropped sharply. If earlier it averaged 5-10%, now it is 1.5-2%. The rise in prices for compound feed and components for them is also associated with an increase in prices for fuel, equipment, etc., as well as the devaluation of the ruble.

Prices for meal are also growing: sunflower meal has risen in price by 60% (February to February), soybean meal - by 45-55%, and the cost will continue to increase. At the same time, the volume of production and processing of sunflower has not decreased, and prices are not decreasing, despite the promises of processors, he noted. “The processing industry promised us that a ton of sunflower oil would cost 95 thousand rubles, and it costs 105-117 thousand rubles. And this trend, due to the approach of the new harvest, will continue: oil prices will rise,” Afanasiev said.

In general, the feed industry performed in 2020 with an increase of 1.4% (30.8 million tons) compared to 2019, despite expectations of a serious decline. However, in January 2021, there was a slight decrease in the production of compound feed by an average of 0.6-1%, the most noticeable decline in the production of poultry feed: minus 7.9%, this is due to a decrease in the sale of poultry products, the HEAD of the union said.