Turkey's cattle farmers feel the brunt of high feed costs

By Jane Byrne contact

- Last updated on GMT

© GettyImages/BulentBARIS
© GettyImages/BulentBARIS

Related tags: Usda, Turkey, milk production, compound feed prices

Many Turkish cattle farmers are struggling to make ends meet because input costs, especially feed, are increasing at a faster pace than farmgate prices for carcass meat and milk.

A USDA FAS report finds that, as a result, many farmers are cutting their losses and sending their animals to slaughter earlier than normal. “This trend is expected to continue into 2023 as economic conditions in the country remain bleak.”

In 2023, beef production, however, is forecast to increase year-on-year to 1.5 million metric tons (MMT), up 200,000 MT from the previous year, based on the expectation that cattle slaughter numbers will remain robust, but also due in large part to the Turkish ministry of agriculture and forestry’s recent decision to permit 160,000 head of imported feeder cattle over the coming months, said the USDA team.

The ministry hopes that these imported feeder cattle will help alleviate the rising cost of beef at a time when overall food inflation in Turkey is at record levels.”

Milk production in 2022 is expected to decline, though, as dairy farmers liquidate some of their cattle inventories because of rising input costs and low raw milk prices, they added. Turkey produced 23.2 MMT of milk in 2021.          

Rising feed prices

The price of compound feed for dairy cows and feeder cattle is up 138% and 160%, respectively, from last summer, according to data from the country’s livestock producers association. In addition, feed barley prices have quadrupled, and hay prices have doubled during the same period.

Turkey’s dairy and beef cattle farmers, especially small-holder farmers, are said to particularly sensitive to the cost of feed since it accounts for about 80% of total farm expenditures.

The main reasons for rising feed and other input costs are higher international commodity prices and the continued depreciation of the Turkish Lira (TL) against the US dollar, reads the USDA report. In just the last year (Aug 2021-Aug 2022) alone, the TL has lost half of its value against the dollar.

The price of compound feed is particularly vulnerable to these outside economic pressures since about half of the 27 million metric tons of compound feed made in Turkey during 2021 was produced from imported ingredients, noted the authors.

“Other factors leading to higher feed prices are the lack of integration between feed and livestock producers and climate change. Drier weather conditions in certain parts of the country during the past couple of years has reduced the amount of available graze, leading to increased demand for compound feed and higher production costs.”

Government intervention

Meantime, the Turkish government has tried to intervene to stabilize domestic feed prices, but, reportedly, with little effect.

The Turkish Grain Board (TMO), a government-affiliated entity, continues supplying subsidized feed ingredients, especially imported barley and corn to Turkish livestock producers. “However, there are complaints from across the livestock sector that these discounted prices, while helpful, are still too high for most farmers to make a consistent profit.”

The government also cut import tariffs to zero for major feed ingredients and has pressured feed manufacturers to reduce compound feed prices.

“In February of this year, the government decreed that feed producers must lower their price for mixed feed by 12%. However, feed makers were unable to lower their prices amid rising input costs, and instead had to raise prices within a few days after the decree was issued.”

In addition, to encourage cattle and other livestock production, the government provides annual support payments, though many farmers consider this support to be inadequate, noted the USDA team.

                                     

Related topics: Markets

Related news