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News 266 views last update:6 Aug 2012

Increased animal feed prices in Japan

Due to higher prices of key ingredients maize and soybean meal, the Japanese National Federation of Agricultural Cooperative Associations (Zen-Noh) plans to raise the price of its formulated livestock feeds by ¥4,500/tonne (€27.5) on average after the current April-June period.

Rates of increase will vary according to regions and types of livestock. On average, the blended feed will be priced at around ¥61,900/t (€379), and as prices charged by Zen-Noh serve as the benchmark for the domestic market, it is expected all similar feed prices will rise.

The stock feed price increases this year have already been reflected in higher retail prices for beef, chicken and pork in Japanese supermarkets, and more increases are forecast as the current world shortages of feed grains continues, and could even become more severe. The supply of milo sorghum in particular is very tight according to one miller, with no easing expected in the short term.

Biodiesel
The use of stock feed grains to produce biodiesel is also having a major impact on availability. Although the return of US meat to Japan kept down retail prices to some extent, feed prices in the US were also rising and although the US dollar was low against the yen, US meat prices were bound to increase.

Affecting aquaculture
The feed shortage is also affecting fish producers, with many aquaculture companies going out of business due to higher aquafeed costs, up between 20% to 30% in the last 12 months. Feeds account for about 60% of aquaculture costs, and this coupled with steady consumer demand, is keeping retail high prices for farm-raised amberjack and Japanese horse mackerel, according to one wholesaler. It is also difficult to increase the wholesale price of locally reared fish because similar fish varieties can be imported from China and South East Asian countries at very competitive prices.

In Australia which is a major supplier of meat to Japan, the manager of market information with Meat and Livestock Australia, Peter Weeks, said many feedlots were operating at a loss to maintain hard-won overseas markets, and were also being hit by falling export prices for grain-fed products to Japan principally due to the high Australian dollar and the return to that market of US meat products.

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