Turkey will suffer a major blow in milk and meat production if the necessary support is not given to the producer by urgent intervention in feed prices. Due to the increasing feed costs, the producers have become unable to care for their animals in the barn and farm. In the face of almost weekly price hikes, it has become unable to cover its costs, let alone the profit of the producer. If this situation is not urgently intervened, the producer will be officially baited for feed prices!
TURKEY 55 PERCENT FOREIGN DEPENDENT ON FEED
Wheat and barley prices rise in the domestic market due to the loss of yield due to drought, while increasing exchange rates constantly increase feed prices. Turkey's dependence on imports for feed raw materials by half causes feed prices to be directly affected by exchange rates. The compound feed sector, which is dependent on foreign sources by 45-50% and indirectly 55-60% according to official figures, is directly affected by the increasing exchange rate.
FEED INCREASES AS THE EXCHANGE INCREASES
When the average unit prices of the most used and imported raw materials in the production of fattening feeds, dairy feeds, broiler and egg feeds in the last 5 years are examined, it is clearly seen that the biggest reason for the increase in unit prices is the increase in the exchange rate. Compared to the previous year, the increase in raw material prices in June 2021 is 108% in corn, 100% in barley, 60% in soybean meal, 91% in wheat bran, 81% in high protein sunflower meal, 85% in corn DDGS and 109% in high protein cottonseed meal. rate increases in one year.
THERE IS A GREAT GAP AND IT IS GETTING GREATER
While feeding expenses constitute 70-75% of the expenses in livestock enterprises, the decrease in meat/feed, milk/feed and feed/egg parity threatens the producers seriously. With feed prices, parity in red meat and raw milk is no longer valid. Under current conditions, raw milk prices should be 3.75 TL and red meat carcass cutting prices should be 65 TL in order for the producer to continue production. However, while the raw milk prices were announced as 2.90 TL by the National Dairy Council, the carcass cutting prices for red meat were applied as 36 TL by the IHC.
Feed prices, which varied between 70 and 80 liras last year, exceeded 130 liras this year. 50 kilograms of feed, purchased at prices starting from 80 liras in 2020, is bought from 143 liras this year. At some points, these prices reach up to 200 liras.
PRICES CANNOT BE STOPPED... MARKET CONTROL LOST
Speaking to our newspaper, agricultural engineer Süleyman Hartavioğlu said, "The increase in the exchange rate, the high commodity prices in the last 9 years and the increase in import costs, which are seen as a temporary solution every year, lost the control of the market. As a result, the feed industry started to have difficulties in supplying the raw material it needed. This was also reflected in the prices. In recent years, the increase in the number of animals and the falling forage crops cultivation areas have made the prices unstoppable."
Drought is also a big problem this year!
Drought and the constant rise in exchange rates made production in livestock almost impossible. Due to the drought, barley is sold for 2,800 liras, exceeding the wheat prices, while factory feeds increase daily due to the increase in exchange rates. In the face of increasing feed prices, raw milk should be 3.75 TL and carcass cut in red meat should be 65 TL, while official raw milk prices are 2.90 TL and carcass cutting price is 36 TL.
In the past, feed prices were raised monthly, but recently there has been a daily increase. Although the most important input of animal husbandry is feed prices, producers cannot sell their milk even at the price determined by the National Dairy Council with the suggestions of the Food Committee. While the latest raw milk prices were announced as 2.90 TL, the producer can only sell his milk for 2.80 TL with the pressures of the dairy industry.
“THE MANUFACTURER CANNOT CONTINUE PRODUCTION AT THESE CONDITIONS”
Tevfik Keskin, Chairman of the Turkish Dairy Producers Center Union, stated that the milk producer could no longer stand against feed prices and demanded that the government intervene in these prices urgently.
Keskin pointed out that the production cost of 1 kg of milk is 3.13 liras, but the producer could not sell his milk even for 2.90 liras determined by the National Milk Council.
"It is not possible to continue production under these conditions. Both feed prices and milk prices need to be intervened urgently. In this difficult period, we will no longer give milk to the industrialist who wants to buy cheap milk from the hand of the producer," Keskin said.
WHY ARE PRICES RISING?
The drought experienced this year caused a serious loss of yield in barley and wheat, and this caused the prices in the domestic market to be well above the announced purchase prices. While the Ministry of Agriculture and Forestry remained silent about the drought for days, the painful toll of the drought became heavier with the harvest. Although it was stated that the drought was only effective in a limited area in the dry farming areas at the beginning and would not cause a serious loss of yield, it turned out that the situation was not like that at all.
MINISTRY EXPECTED 1 MILLION TONS OF WHEAT LOSS
Although the danger of drought showed itself, the Ministry of Agriculture and Forestry had ignored the farmer's cry in the field for weeks. While it has been announced that the drought is effective in certain provinces in the Southeastern Anatolia Region and will cause a yield loss of approximately 1 million tons, everyone has now accepted that the yield loss in wheat may reach up to 5 million tons at this point. On the other hand, while the yield loss in barley is not talked about in any way, the biggest product loss in drought will be experienced in barley. It seems certain that the yield loss in barley will reach 50 percent compared to last year. While last year's barley yield was approximately 8 million tons, this year it is expected to drop below 5 million tons due to drought.