Fixing feed costs benefits leading pig producer
Forward purchasing of feed raw materials at fixed prices through the AtlasFram Group farmers’ cooperative is fulfilling a critical role by helping one of the UK’s leading pig producers to cope with extreme volatility in the global commodity markets.
“The very difficult business environment currently facing the UK pig industry makes it vital to do everything we can to control our production costs,” emphasises Simon Guise, Pig Business Manager for Bacton Pigs, which manages and cares for more than 40,000 pigs. A subsidiary of David Black & Son Ltd, Bacton Pigs also has the UK agency for DanBred International, marketing and selling breeding gilts and AI across the UK under the DanBred International UK banner.
“For any pig business the key factors governing profitability are the cost of feed and the price we receive for pig meat. Although end-product prices have been relatively steady, our margins have been under increasing pressure from rising commodity prices and the weakness of the Euro. In the last 12 months the Euro has fallen in value against Sterling by around 12%, which has further reduced the UK’s competitive position compared with European producers.
“Input cost volatility is a constant factor which we have to consider and have learned to work with. Our strategy is to use the very best genetics to produce pig meat as efficiently as possible, maximise production so that we dilute our fixed costs and purchase raw materials to produce feed at the best-possible prices to minimise inputs costs.
“With the exception of creep diets and sow rolls we produce all the feed used on our units. During the last 12 months we have milled and mixed 15,000 tonnes, of which David Black & Son farms produced 4500 tonnes of raw materials. The balance was purchased as efficiently as possible through AtlasFram and where possible we have reduced the impact of volatile commodity markets by securing our requirements at the most favourable times using forward contracts and futures to fix prices.
“AtlasFram Membership has become increasingly important to our business, as they do an excellent job of purchasing a wide range of raw materials, including wheat, barley, soybean meal, biscuit meal, pulses and fishmeal at the best possible prices. By closely monitoring markets and recommending the best time to take a position they have saved us a great deal of money. Tim Styles, the Group’s Livestock Products Manager, has an in-depth knowledge of our business and requirements, so he is able to advise us when to enter the market or, equally, hold back from purchasing to secure the best prices.
“In the past we have purchased straights up to two years ahead and currently have forward cover on some raw materials for the next 18 months. This gives some element of control in a business which is notoriously difficult because the price of the end product is unknown until pigs leave the farm, whereas input costs can vary dramatically.
Tim Styles, Livestock Products Manager for AtlasFram Group, states: “Whilst we cannot influence global commodity prices or exchange rates, we can help UK producers to purchase feed and raw materials when prices are most favourable. In today’s market that represents a significant advantage by allowing producers to time purchases to coincide with pullbacks in the market and using futures to protect against adverse price movements.”
Further details: Tim Styles, Livestock Products Manager, AtlasFram Group T: 01728 727700.
ENDS:
Further press information from:
Julian Cooksley, Kendalls Communications
T: 01394 610022 E: julian.cooksley@kendallscom.co.uk
Digital images from:
Kerry-Anne Rookyard, Kendalls Communications
T: 01394 610022 E: kerrry-anne.rookyard@kendallscom.co.uk
NOTES FOR EDITORS
1.
AtlasFram Group is a highly-successful farmer-owned cooperative with an annual turnover of £168 million. Based at Framlingham in Suffolk, it purchases all types of farm inputs and markets combinable crops on behalf of 1250 Members, who collectively farm more than 300,000 hectares throughout the UK. The Group attracts professional arable and livestock farmers who recognise the value of belonging to a large, expertly-managed input purchasing and crop marketing business which operates entirely on their behalf.
In addition to financial savings on a wide range of inputs, from fuel, fertiliser and ag-chem to workshop equipment, tyres, electricity, building materials, feed, animal health products and mobile ‘phones, AtlasFram Members benefit from access to a team of product specialists. Working solely in the best interests of Members, they provide expert advice on a wide range of farming-related issues, advise when to place orders to obtain the best discounts and ensure that products are delivered on time, to the right location. Members receive just one monthly invoice showing all purchases, which further reduces the time and cost of administration.
Further details are available at www.atlasfram.co.uk
2.
Bacton Pigs manages and cares for over 40,000 pigs, the three main operations being breeding gilts, outdoor pigs and indoor production. These include 3430 breeding sows and gilts which are kept on one outdoor and two indoor breeding units, together with five finishing sites and a boar stud supplying genetics to the breeding herds.
Bacton Pigs also has the UK agency for DanBred International, marketing and selling breeding gilts and AI across the UK under the DanBred International UK banner (www.danbredint.co.uk)
Tags:
