Months after an incident at a BASF chemical factory in Ludwigshafen, Germany, that caused a shortage of vitamins A and E, consumers may see feed and nutritional supplement prices rising. Even as the plant resumes operations, some vitamin prices are increasing by 1,000%.
A technical equipment failure sparked a fire at the BASF’s Citral production plant Oct. 31, 2017, after a scheduled maintenance shutdown. According to BASF, the incident destroyed “key electric components that are needed to steer production processes.”
The plant produced approximately 45% of the global supply of Citral, a chemical compound used in the production of Vitamins A and E. Vitamins A and E are major elements in human and animal nutrition products, in addition to cosmetics.
BASF announced a Force Majeure on the supply chain of Citral and described the measures they would take to attempt to mitigate the consequences of the shutdown by utilizing residual amounts of Citral.
Their main priority is to minimize the shortage of vitamin A in human and animal nutrition markets.
“In our Animal Nutrition business, we focus on producing additional volumes of Vitamin A1000,” BASF explains. “We took this decision due to the extreme shortness in the Vitamin A animal nutrition market and due to the possible negative consequences of too low Vitamin A dosage rates on animal performance and welfare.”
Regardless of attempts to mitigate short supply, the shortage of Vitamin A in particular has resulted in a price increase of up to 10 times, per pound, for many customers since October, according to David Mathes, director of sales and marketing for Kauffman’s Premium Equine, a division of the Daniel Baum Co.
This ultimately will affect the price of products that contain vitamin ingredients. As supplement and feed companies face a price hike, consumers will see some product prices increasing as long as the shortage is still in effect. However, several state that they are working hard to keep prices down for consumers.
“Although ingredient costs have increased significantly, Life Data strives to mitigate their impact through volume purchasing of ingredients, through increased production efficiency and by other means,” says Dr. Scott Gravlee, equine nutrition consultant for Life Data Labs. “Our goal is to supply the market with the same quality products, such as Farrier’s Formula, at stable prices.”
Jessica Normand, SmartPak’s senior director of product research and development, says the Massachusetts-based company is in a similar situation.
“While there are some price fluctuations going on in the raw material supply right now, SmartPak is confident in our ability to source ingredients at a good price,” says Normand.
Farnam officials say their inventory has put them in a good position.
“Our business is minimally affected by the shortages,” says Stash Easton of Farnam. “We are in a good inventory position with our ingredients. We have seen some price increases, but the suppliers are trying hard to keep everyone in business and not allowing the stockpiling of excess ingredients.”
Animal nutrition companies will be affected differently based on variables such as company’s stock of vitamins and their ability to attain more as needed — and for how much.
The Ludwigshafen plant is scheduled to restart production of Citral on schedule, as the plant is being filled with chemicals and undergoing testing and inspections according to an update from BASF. After production restarts, shipping Vitamins A and E for animal nutrition will take at least 6-12 weeks to begin. BASF estimates that it will then be several weeks or months before the products can be shipped to North America.
Factories closing intermittently in China may also be contributing to the higher vitamin costs — including vitamins B, C and D — amidst a government initiative to enforce environmental laws and better regulate pollution.