Market News

Animal feed milling firms close shop on high inputs prices

feed

A worker carries a bag of animal feeds. FILE PHOTO | NMG

geraldandae

Summary

  • The cost of making animal feeds has gone up for the third time in three months, forcing up to 20 manufacturers to close shop amid low demand from farmers due to pricing.
  • Joseph Karuri, the chairman of the Association of Kenya Animal Feeds Manufacturers, said the price of soya, which is the most expensive of the supplements used in making animal feeds, has gone up to Sh83 from Sh53 at the beginning of December.
  • The 57 percent jump in price of soya is the biggest in the last two years with manufacturers projecting that the earliest the cost will come down is May.

The cost of making animal feeds has gone up for the third time in three months, forcing up to 20 manufacturers to close shop amid low demand from farmers due to pricing.

Joseph Karuri, the chairman of the Association of Kenya Animal Feeds Manufacturers, said the price of soya, which is the most expensive of the supplements used in making animal feeds, has gone up to Sh83 from Sh53 at the beginning of December.

The 57 percent jump in price of soya is the biggest in the last two years with manufacturers projecting that the earliest the cost will come down is May.

“The cost of production has become unbearable to some of the millers who have had to shut their businesses as they cannot sustain the ever-rising cost of material,” said Mr Karuri.

The cost of animal feeds has subsequently gone up across all the meal types, which are now retailing at an average of Sh100 more than the previous cost.

The cost of a 70-kilogramme bag of chick mash has risen from Sh3,600 to Sh3,700, grower’s mash is now selling at Sh3,000 up from Sh2,900 while that for layers is going for Sh3,300 from Sh3,200 last month.

This move has hit farmers as the price of eggs has so far dropped from a high of Sh360 a tray early in the year to Sh340.

This implies that the producers are struggling with lower margins, making it difficult to continue with the business.

Mr Karuri said most millers are at concerned with breaking even to pay their workers and keep on running their entities profitably.

CAKE IMPORTS

The millers have reached a point where they can no longer increase the cost of animal feeds as the current prices have had a direct effect on demand, Mr Karuri.

The processors are also projecting that the cost of other major supplements such as sunflower cake, which is mainly imported from Tanzania and Uganda, will go up due to a weaker shilling against the dollar.