In normal times, feed companies just don't roll out the red carpet for a livestock farmer who wants to become a customer, but that is different now. The shortage of raw materials, made even more acute by the war, is making companies realize that supplies are at stake. That's why the boat is held off. Some companies already have a customer stop in place, others call it a close call.
Grain prices have exploded due to the war in Ukraine. The wheat price has climbed to an unprecedented price level above €400 per tonne. When the Matif set a new record at the end of last year, just above €300, it was already world news in the agricultural sector. The sky-high prices symbolize the limited availability of wheat, maize and barley, which are by far the most important feed commodities. These are challenging times for animal feed companies to be able to press and deliver the pellets with wafer-thin stocks.
Especially Vlog food problematic
The shortage of raw materials has been an issue for much longer. Global logistics were severely disrupted last year as a result of corona, and with it grain logistics as well. Last October, several companies already sounded the alarm. According to raw materials trader Cefetra from Rotterdam, it was then 'code orange' in terms of scarcity. With the war in Ukraine as an additional disruptive factor, 'code red' is not an understatement. The supply of grains for VLOG feed is especially problematic, because many non-GMO grains come from Ukraine and that supply is now at a standstill.
Nevedi foreman Henk Flipsen wrote this week a plea to politicians to take action by easing imports from South America. Flipsen finds the situation 'not worrying, but very worrying'. Feed companies are also actively communicating about the dire situation. Fransen Gerrits BV informs on Melkvee.nl that it is currently having a customer stop in order to be able to continue to guarantee delivery to existing customers. The family business therefore speaks clear language that also requires the necessary courage. Other feed companies issue more woolly statements, but with more or less the same purport. With this they probably try to prevent panic from breaking out, which stimulates hoarding behavior and makes the problems even more acute.
ForFamers stops presales
ForFarmers indicates that it does not expect any major problems with the delivery in the coming months. However, the company has stopped pre-sale. The listed animal feed company also issues a disclaimer that loyal customers are given priority in the event of problems. As a result of the unrest, ForFarmers was mercilessly punished on the stock exchange. The rate is the past days sank to a new low just above €3 per share, despite the support of its own buyback program.
De Heus and Agrifirm say they are monitoring the situation closely, but are otherwise reluctant to appoint men and horses if supply shortages arise. ABZ Diervoeding calls on its customers not to hoard but to use a normal ordering pattern. The raw materials supply to the factories are in order, the company claims. Fuite brothers find it difficult to use the word 'customer stop', but say that it actually comes down to this. There is currently no room for customers who shop.
Suppliers of by-products also say that a customer stop is not unlikely in these times.