Feed prices seen going up next year

MANILA, Philippines - Feed prices are expected to go up next year following a projected increase in corn prices and a shortfall in supply of feedwheat.

This was the assessment of corn growers and feed manufacturers following a drought in some Baltic countries producing wheat, the flooding that is still affecting Pakistan which also produces wheat, and an increase in demand for corn from China which had previously been a supplier of corn.

No less than Pilmico president and chief executive officer Sabin Aboitiz acknowledged a possible rise in feed prices as feed companies have to shift back to the use of corn in the production of animal feeds following a drought that has hit several Baltic countries producing wheat.

Corn, a source of protein, is traditionally the major raw material in the production of animal feeds.

However, feedwheat is a much cheaper alternative to corn.

Unfortunately, a severe drought has destroyed a big production of wheat from Russia, Kazakhstan and the Ukraine, forcing those countries to temporarily impose a ban on the export of wheat.

Russia, Kazakhstan and the Ukraine supply about 90 percent of the world wheat market.

For now, though, Aboitiz assured, Pilmico is holding steady with its feed prices because it has already bought its supply for the period.

At the same time, according to Roderico Bioco, chairman emeritus of the Philippine Maize Federation (PhilMaize), China (which used to supply 20 percent of the world production of corn) is now entering the market as a buyer with an expected demand of 20 percent of the global corn supply.

 “That’s a 40 percent increase,” Bioco cited, projecting that it would push corn prices upward, which would be good for Filipino corn farmers.

Bioco, likewise, cited the what production shortfall experienced by Russia, Kazakhstan and the Ukraine due to a severe drought, and the severe flooding in Pakistan which has also wiped out its wheat production.

In fact, even at this time, Bioco pointed out, “local corn prices of P12 to P13 per kilo is already at parity.”

The higher corn price outlook, Bioco said, is good for Filipino farmers as it would encourage them to plant more corn.

Bioco assured, though, that while higher corn prices and the lack of feedwheat would translate to higher feed prices, the effect on meat prices—thus, to consumers would be about six months after and would still depend on supply.