According to one major feed supplier, PKE prices for three, six-to-nine and 12 month contracts are $342/t, $341/t and $340/t respectively. Those prices do not include transport costs.
PKE prices were around $262/t back in July when Federated Farmers dairy vice-chair Ben Moore bought on contract.
He says buying PKE during winter on a six month contract was not unusual.
He bought some more on Thursday at $335/t. He says the July purchase was a gamble, but one that has paid off.
“A lot of people do not contract the whole season straight away. This time around I probably should have, but you don’t know,” he said.
The speed of the price increase surprised him. In a matter of days, prices had lifted $7-$8/t.
“It’s just been going up and up. Is $335 the end of it or is it going to keep going?” he asked.
He drew up this season’s budget back in April and budgeted on that price.
There was also a lot of silage being made on farms over the past month and maize and other summer feed crops being planted.
That silage should plug any feed deficits in those months after Christmas before those crops were ready to be fed out or harvested. It should also dilute the costs of any extra feed that has to be bought in.
“There’s probably more maize in the ground this year and I think after last year people are thinking ahead even more,” he said.
He says those farmers who suspected they might have a feed deficit this summer should seek organisations such as DairyNZ which they paid levies to.
“They are not there to judge, they are there to do a job,” he said.
Federated Farmers board member Chris Lewis says the high PKE prices led to him slightly reduce his stock numbers.
“I was buying PKE for $220/t delivered a couple of years ago and I was using a fair bit. It’s gotten so expensive now that with current milk prices, it’s not economical to use it,” he said.
“If you are buying off the stock market or contracting it at current prices you wouldn’t be feeding it to produce. You’ve gone past the break even (price).”
He says farmers buying at the current prices would not be able to pay their way out of a feed deficit if there is another dry summer.
