New equipment could lead to lower animal feed prices

The island’s sole manufacturer of animal feed has installed a $1 million state-of-the-art mixer it says will improve efficiency, productivity and quality, and could ultimately result in lower prices for farmers and consumers.
Officials of Roberts Manufacturing Company Ltd, the parent company of Pinnacle Feeds Limited, said the equipment which was installed this month is also expected to better position the company to ramp up exports.
Chairman of the board of directors of Roberts Manufacturing
Peter Bunting told a media conference on Wednesday that production is expected to increase up to fourfold.
Asked whether this, coupled with the expected reduction in operating costs, could result in lower feed prices for farmers, he said: “I wouldn’t want to pretend that by putting in a new mixer you are going to see the cost of your products go down significantly.
“Yes, on the margins it will improve your productivity and it will improve your efficiency. Hopefully, if we can produce the same amount of feed in two shifts rather than three, then there is going to be cost savings in terms of energy and overtime and those will be put through, those will benefit consumers ultimately. The reliability will also benefit consumers.”
However, with the new system only about a month old, Bunting was unable to say what cost savings were likely for the company and how much it could pass on.
With price support from the Government ending in February this year, Pinnacle increased feed prices by an average of eight per cent last month, resulting in farmers and retailers raising their prices as well.
Bunting said that between 70 and 80 per cent of the cost of feed production was associated with the inputs of corn, soya and micro-ingredients while the other 20 to 30 per cent related to plant efficiency, including energy and other overheads.
“So the drivers for the increases in livestock feed over the last two years have been, in a sense, completely out of our hands . . . . When we trace those prices, we have had just about 100 per cent increase in those commodities over that period of time. We have not passed through all of that to our consumers. We have absorbed [it],” the Roberts chairman explained.
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