High corn prices hurting feed millers

MANILA, Philippines — The country’s feed millers are bearing the brunt of high prices of local corn, prompting them to resort to more feed wheat imports.

The Philippine Association of Feed Millers Inc. (PAFMI) said traders are currently selling corn at a high of P17.50 per kilogram from the farmgate price of P12.77 a kilo.

“Local traders have cornered the local corn supply and pricing it beyond the cost that will enable feed millers and hog and poultry farmers to produce animal feeds at competitive costs,” PAFMI president Nicole Garcia said.

Corn comprises 60 percent of the ingredients for the production of animal feeds. The cost of feeds takes up 80 percent of the cost of meat and chicken production.

According to the PAFMI, local harvest is delayed and northern provinces are reporting some drought damage and less than expected harvest, prompting local prices to shoot up.

Because of the high prices of local raw materials, PAFMI has purchased 81,200 metric tons of feed wheat from Black Sea and Australia which when delivered to Manila would only cost  about P12 per kilo.

Of the total volume, 37,000 MT will come from Ukraine next month. The remaining 44,200 MT will come from Australia and will arrive in December.

PAFMI said it was working with the Department of Agriculture to increase corn production which had fallen short of the feed milling sector’s requirements.

Data showed that the Philippines produced eight million MT of corn last year. Of this, 25 percent already went to the snacks industry and other industrial use for human consumption.

Feed millers, livestock and poultry raisers require nearly 10 million MT of corn annually, thus, forcing them to import feed wheat.

Corn, however, remains the preferred ingredient due to its higher carbohydrate content which provides the energy giving component of the feed formula.

To boost corn production, the DA and PAFMI have lined up contract corn growing which assures the farmers of a market for their produce at a reasonable margin.

The DA has also linked the feed millers to local governments units for direct purchase of corn from farmers.

PAFMI is the biggest association of feed millers in the country with 33 member companies including San Miguel Corp., Universal Robina Corp. Pilmico Foods, La Filipina Uygongco Corp. and General Milling Corp.

Its members produce 70 percent of the country’s total animal feed production.