Planning at least 1-2 seasons ahead critical for good feed buying

First published:

Length: 107 words; <1 minutes

Feed market volatility graph

The volatility of modern feed markets means good forward plans, accurate market information and strategic forward buying are key to controlling costs and risk.

The most forward-thinking farms routinely plan 18 months or more ahead, working with nutritionists to estimate requirements and feed suppliers to track the markets. It allows blocks of feed to be ‘locked in’ over time to manage risk and price, and secure supply if availability becomes limited

In addition to traditional forward contracts on bulk commodity feeds, blends and blend ingredients can also now be bought forward, securing potential savings whilst the retaining flexibility to adjust specification if requirements differ from early estimates..

” …market information and strategic forward buying…key to controlling costs…”

Key facts & figures:

  • Feed is the biggest variable costs on most dairy units

  • A £40/t price swing can add £8,000 to winter feed costs for a 200-cow herd1

  • Feed supplier advice that’s accurate, honest and reliable is critical

  • Forward contracts a great tool, but ‘holding off’ is sometimes the right move

  • Consider current price, risk of upswings and compare to historical highs

  • Treat each type of feeds (eg proteins) as a unit when booking blocks of feed

1 Based on 200t of bought-in feed.

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