Animal feed in high demand as livestock margins improve
© Tim Scrivener Better returns for livestock producers have helped drive up demand for animal feed so far during the 2024-25 season.
Margins have improved on farm as a result of lower feed costs and higher finished beef and sheep prices, making the use of bought-in feeds more cost-effective in the short term.
Prime beef cattle has been selling in excess of 650p/kg deadweight in mid-March, while deadweight lambs average 738p/kg for the week ending 8 March.
See also: Farm incomes lift for dairy and livestock as cereals drop
The numbers
- 4.4%
Annual increase in total cattle and calf feed volumes (2024-25 season to date) - 655
Average deadweight steer price (p/kg) - 46
January 2025 Defra farmgate milk price (p/litre)
Defra figures show total cattle and calf feed volumes were up by 4.4% on the year between July 2024 and January 2025, while sheep feed volumes were up by 15%.
Increased volumes of cattle and sheep feed are expected to outweigh small declines in demand from pig and poultry sectors, with total GB animal feed production up by 1.3% on the year so far this season.
Looking forward, AHDB expects demand for compound feed to rise during the 2024-25 season as a result of increased interest from livestock and dairy producers.
It also forecasts increased cereal inclusion over alternative proteins in feed rations.
Jess Corsair, AHDB senior economist, said: “While cereal inclusion in feed rations will likely remain steady, the global grain market’s bullish trends could increase feed prices.
“However, the bearish outlook for oilseeds and the potential for higher soybean supplies may limit price increases in the longer term.”
Straights volumes were up by 11% year-on-year at 122,000t, while total compounds, blends, and concentrates increased by 1.2% to total 6.43m tonnes.
Dairy feed demand
The AHDB milk-to-feed price ratio, which measures how much feed can be bought with one litre of milk, lifted to 1.53 at the end of last year, which puts it in the expansion zone and encourages feeding on farm to increase milk production.
Costings from dairy specialists Kingshay showed that total concentrate usage a cow had increased by 6% to 10.2kg a day in December.
However, concentrate prices were £20/t lower on the year at £305/t, which helped to offset this increase.
Callum Bolton, from the dairy technical team at Wynnstay, said: “As dairy cows transition to fresh spring pasture, gradual introduction is required to prevent digestive disorders and ensure optimal rumen health.
“Limiting initial grazing periods and increasing exposure over two to three weeks enables the rumen microbes to adapt to the diet change.”
Straw, fuel and fertiliser
The British Hay and Straw Merchants Association has reported a fair demand in many areas, with big square wheat straw ranging from £60/t in eastern counties to £80/t in the South West and Scotland.
Analysts at AHDB say that as the need for bedding and forage increases, there is likely to be a tightening of supply and upward pressure on prices.
Contractor prices for baling and wrapping have seen a continued rise during recent harvests, according to figures from the National Association of Agricultural Contractors.
Fuel and fertiliser markets appear relatively stable by historic standards, but all markets continue to face volatility and outlooks remain uncertain.
Jess Corsair, from AHDB, said: “Farmers will need to carefully manage their production and costs as they adapt to these conditions, with a new price level and supply constraints expected in the coming years.
“Weather will remain a critical factor influencing market trends.”