Pasture supplement manufacturers are voicing concern about a worsening scarcity of key feed ingredients as dry conditions send demand for limited supplies soaring.
Prices for cottonseed meal have surged from $350/tonne in early May to $650/t now, with new supply only available for delivery later in the year.
Cottonseed meal is produced as a by-product of the crushing process used to extract cottonseed oil.
Only one plant currently crushes cottonseed in Australia, Cargill’s cottonseed oil facility at Narrabri.
Feed manufacturers who rely on cottonseed meal have been told that a subdued market for cottonseed oil is making the product difficult to move this year, and the plant will only be crushing the cottonseed that has already been contracted for this year.
As a result production of the by-product cottonseed meal is unlikely to increase in Australia to match the increase in demand now being created by drought.
Roma stock feed manufacturer Stephen Aisthorpe from Top Country said cottonseed meal is a highly sought-after ingredient for feed mixes. It is a rare accessible source of slow breakdown microbial protein, which encourages cattle to fully utilise all available grass in a paddock, rather than dwelling at water and feeding points.
Other sources of slow microbial protein included copra meal, which is reliant on imports, and Dry Distillers Grain syrup, a by-product of grain-based ethanol production, but both are in small supply in Australia.
Paddock supplement manufacturers are hopeful the dramatic recent increases in the price of cottonseed meal may trigger an increase in production to help supply drought demand.
Mr Aisthorpe said the supply shortage was “absolutely crippling our industry” in the current demand environment.
‘We have got a problem, and it’s a big problem’
“We have got a problem, and it’s a big problem,” Mr Aisthorpe said.
“Short isn’t the word. The stress my staff are going through in regard to the supply of product on time is far worse than any other stress encountered in feed milling, because we’re concerned for our customers’ productivity.
“We have always had to contract our cottonseed meal early because then there is a threat of not being able to purchase at will when needed.
“We bought cottonseed meal last year because it is that hard to get, but with the demand now we’re still literally thousands of tonnes short of what we need.
“If it stays dry it is going to be a nightmare in a month.”
The increasing unavailability of feed meals could also have implications for producers supplying cattle to certified grassfed programs this year, who may be forced to use feeds incorporating grain by-products if dry conditions continue.
A spokesperson for Cargill Australia told Beef Central this week that the company’s Narrabri plant is currently producing cottonseed meal to meet all their current contracts.
He said he believed they would be looking to then take on new contracts, but added that he couldn’t give a time-frame on when that may happen.