Collaboration key to reducing egg producers' feed costs

Free range egg producers have the power to reduce the cost of raw material feed inputs if they get comfortable co-operating and collaborating together, Andrew Knowles, chief executive of Fram Farmers has said. Addressing the British Free Range Egg Producers Association (BFREPA) Conference 2022 in Birmingham on Thursday September 29, Mr Knowles said the price of feed was critical for business’ profitability, making up 55 per cent of the total cost of production.He outlined a group of 20 pig producers within Fram had saved approximately 2 million in raw feed material costs in one year through a risk management strategy based on cooperation and consolidation of volumes, with poultry producers now invited to join the group."Feed price is made up of raw materials, nutrition and compliance, wrapped up in different ways by organisations," he said."But producers can have more control, understanding and influence in the cost of the feed they are purchasing and using in their business."Working together, these pig farmers sat down with a feed partner and nutrition partner and [..] decided to take charge of the raw material." He added the strategy focused on technical analysis such as algorithms and pricing points to fundamentals such as supply and demand and markets.Toby Rush, a third generation farmer from East Anglia who farms 32,000 layers and has a Lion assured egg packing centre, said: "I have long believed in the cooperative approach of buying groups."Principally, you are employing a professional team to price your inputs that are typically better than average."But is not just about the price, it gives me valuable time back and removes the worry of whether I am doing the best job I can on purchasing."EnviousHe said he had long been envious of the pig feed buying group run by Fram, and had agitated for there to be a poultry feed equivalent."In the end better minds than me agreed there was no need to reinvent the wheel and poultry farmers could join the existing pig feed buying group," he said."Many of the raw commodities are the same, and new poultry members added to the already substantial buying power of the group."The group also negotiates milling rates, a strategy which has consistently reduced costs on every tonne of feed milled."Supportive contractsHe added he was aware individual producers were not always at the liberty to choose where their feed came from."However, as we look to drive more supportive contracts between producers and packers, these are real cost saving opportunities that perhaps producers should be pushing for," he said."Equally there is no reason a packer cannot offer feed supply to its producer base through an independent cooperative like the one managed by Fram."Mr Knowles stressed producers needed to change their thinking by working with supply chain partners."It is the producer who should be driving all the raw material buying but to do that, producers need to come together to access the tools and expertise to deliver a more risk-managed, resilient way of purchasing feed," he said.