Increased animal feed prices in Japan

06-06-2008 | |

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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