Feed prices to remain high in 2024: USDA

The high prices of feed for poultry, aquaculture and cattle will continue to affect farmers in 2024, said a US Department of Agriculture (USDA) report released last Tuesday.

In the second week of December 2023, the average price of poultry feed reached Tk 66,000 per tonne, which was a 20 percent increase compared to the same period a year ago, it said.

Meanwhile, the average price of aquaculture feed rose 25 percent to Tk 85,000 per tonne, the USDA said in its report on oilseeds use in Bangladesh.

Elevated prices of key feed ingredients have contributed to the overall increase in feed prices, said the report, citing the Feed Industry Association Bangladesh (FIAB) and the Bangladesh Poultry Industries Central Council (BPICC).

"Bangladesh's feed industry relies on imports for most of their feed ingredients. In 2022, the devaluation of the local currency against the US dollar made imports more costly in conjunction with high international prices," it said.

And challenges in opening letters of credit affected imports of corn and soybean meal. Additionally, locally crushed soybean meal prices have reached a record high since August 2023.

"Collectively, these factors contribute to the high cost of feed production," it said.

However, demand for feed will remain high, added the report.

This is because the growing poultry, aquaculture and dairy sectors require more formulated feed than before and commercial farms are expanding operations to meet the demand for eggs, meat, fish and milk, said the report.

Due to very high prices of feed, many small poultry farmers shut down their farms in 2022, it said.

"However, recently commercial poultry farms have expanded their business. Some large private feed companies have started contract farming for poultry production. The use of formulated feed has also increased in aquaculture production," it said.

The feed industry boosted their production on increasing demand for poultry and aquaculture feed starting in the third quarter of 2023, said the US agency.

The report said livestock feed production in Bangladesh stood at 66 million tonnes in 2022.

"Despite economic challenges and high feed prices, demand for feed is expected to grow in Bangladesh as large commercial poultry farms have expanded their operations and some major feed producers have initiated contract poultry farming," said the report.

The report forecast that Bangladesh's feed production would hit one crore tonnes by 2030.

And to meet rising demand for feed, Bangladesh's imports of soybeans and soybean meal will increase.

For the marketing year 2024-25, beginning in July, total soybean import is expected to grow 11 percent year-on-year to 20 lakh tonnes. Likewise, soybean meal import is likely to increase to 10 lakh tonnes from 9.5 lakh tonnes.

Local seed crushing mills will produce the remaining 2.65 lakh tonnes of soybean meals that will be required.

The US agency forecasts soybean meal production by local mills to rise to 16.8 lakh tonnes in marketing year 2024-25, which is a year-on-year growth of nearly 10 percent.