According to a new report, the baleage market is facing a reduction in demand due to the recent price hikes of silage wrap.
While the cost of producing baleage has risen by just 1.6% in the last 12 months, the price of NetWrap silage plastic wrap has increased by 6.3%. This has led to a fall in demand for baleage, with farmers opting for cheaper alternatives such as haylage and grass silage.
There are also concerns that the high cost of silage wrap could lead to an increase in the illegal cutting of hedges as farmers attempt to find cheaper sources of material.
The report, published by Teagasc, also found that baled silage has declined recently, with just 37% of farmers now using it as a main feed source, down from 41% in 2012. This is largely because baled hay is more expensive to produce than other types of fodder.
Despite the fall in demand, the price of baled silage has remained relatively stable, with the average price paid by farmers falling by just 1% in the last 12 months.
The report recommends that farmers who are considering switching to baled silage should weigh up the costs and benefits before making a decision. It also urges farmers to review their current feeding programmes to ensure that they are getting the best value for money.
Several factors have contributed to the rising cost of silage wrap, including the decline in the value of the pound and the increase in the price of raw materials. However, the main reason for the price hike is the introduction of a new environmental levy on plastic waste.
The levy, which is charged at €150 per tonne of plastic waste, has added around €12 to the cost of a standard roll of silage wrap. This has made it more expensive for farmers to produce baled hay and has reduced demand for the product.
The report concludes that the recent price hikes have hurt the baleage market and that farmers must be aware of the costs before switching to this type of fodder.
There are several ways farmers can reduce the cost of baled silage production, including using lower-grade plastic wrap, reducing the size of bales, and using alternative sources of material such as straw.
The report also recommends that farmers explore other options for feeding their livestock, such as grass hay and haylage, which are cheaper to produce than baled hay. Farmers should also consider using a mix of different types of feed to reduce the overall cost of their feeding programme.
The report from agricultural analysts KW market intelligence says that the price hike is due to the increased cost of raw materials used to make NetWrap silage plastic wrap. It adds that the trend is likely to continue in the short term, meaning that the price of baleage is likely to rise further.
However, it says that the long-term outlook for the baleage market is positive, with demand expected to grow as farmers look for ways to reduce their costs.
The report concludes that the recent price hike is unlikely to impact the overall market for baleage significantly, but it could lead to a shift in the mix of products used by farmers.