Turkey removes VAT exemptions on feed premixes as cost pressure livestock sector

TURKEY – The Turkish government has removed VAT exemptions on feed premixes and selected processed grain products, a move expected to increase production costs across the livestock value chain and further pressure already strained feed markets.

According to amendments published in the Official Gazette on January 31, 2026, feed premixes and processed grain products will no longer be classified as “mixed feed,” meaning they will now be subject to a 20% VAT rate.

Industry stakeholders say the change could raise feed costs by around 3–6%, at a time when producers are still recovering from recent animal disease outbreaks and elevated input prices.

“The regulation creates additional financial pressure, sharply increases production costs, which will lead to higher prices for meat and milk,” said Mehmet Doğan, president of Titar Agriculture and Livestock.

Veterinarian and İzmir municipal council member Selçuk Karakülçe warned that the policy could deepen structural challenges in the sector. 

“It seems the government is set on eliminating the last remaining farms,” he said, pointing to risks for small and medium-scale producers.

Turkey’s feed industry sits at the centre of its livestock and poultry value chain, linking grain production, feed manufacturing, and downstream meat and dairy supply.

The sector is estimated to contribute around 1.5–2% to Turkey’s GDP, both directly and indirectly, with feed demand driven primarily by poultry, dairy, and beef production.

 However, the industry is highly exposed to global grain prices, currency volatility and import dependency for key raw materials such as soybean meal and corn additives.

Feed accounts for up to 60–70% of total livestock production costs, meaning even small changes in taxation or input pricing quickly transmit through the entire food system.

In Turkey’s current market environment, rising production costs are already feeding into higher retail prices for meat, milk and eggs, while squeezing margins for farmers and integrators.

Policy shifts, cost transmission and value chain impact

The removal of VAT exemptions is part of a broader set of recent fiscal and regulatory adjustments aimed at improving public revenues and tightening classification rules in agricultural inputs. 

However, in the feed sector, the immediate effect is expected to be inflationary rather than expansionary.

By increasing the cost of premixes and selected feed components, the policy directly raises compound feed prices. 

This cost is then transmitted along the value chain from feed manufacturers to livestock producers, processors and ultimately consumers.

At the farm level, higher feed costs reduce profitability, particularly for small- and medium-scale producers operating on thin margins. 

This increases the risk of farm exits, consolidation and greater reliance on large integrated operators.

For feed manufacturers, the change could tighten demand in the short term as producers cut back on input use or shift to lower-cost formulations. 

In the longer term, it may accelerate import dependency for both feed ingredients and finished animal products if domestic production contracts.

At the consumer level, higher production costs are expected to translate into rising prices for meat, milk and eggs, adding inflationary pressure to Turkey’s already sensitive food basket.

While the VAT adjustment may improve short-term fiscal revenue, it risks undermining domestic food production resilience and increasing exposure to global price shocks.

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