Firming prices for many feeds puts focus on securing contracts*

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With firming prices for many key feeds and plenty of scope for market volatility in the weeks ahead, now could be a good time to secure remaining summer requirements and initial winter contracts, advises KW straights trading manager Claire Bradley.

“UK soyabean meal prices are currently up to around £290–300/t, compared to lows of £260–270/t seen in early May, with prices closer to £330–340/t this time last year,” she states.

“This is despite US soyabean plantings catching up well after earlier delays – now 92% complete – and a good Argentinean soyabean harvest. Continued low demand from China following the swine flu epidemic also means US soyabean stocks are higher than normal, at 1.79 billion bushels, so the markets are generally confident about overall supply.”

Potential price volatility

However, any weather impact on US crop establishment could increase price volatility, and there’s definitely greater scope for prices to rise than fall, warns Ms Bradley. Her view is that farmers should be finalising summer feed buying sooner rather than later, and consider booking at least some of what’s needed for the winter as dips in the market appear.

“…consider booking at least some of what’s needed for the winter…”

“The challenge is that the UK feed prices are still being heavily affected by the low value of Sterling, which has fallen again following reports of weaker than expected economic growth,” she continues. “So when the price of imported feeds like soya hulls rises, as it has done lately, the impact is even greater for UK farmers.

“From lows of £115-125/t in April, we’re now at £150-160/t for the summer and winter, which is a big move. Fortunately, some of the other energy feeds have come back, with biscuit meals such as SugaRich Dairy and SweetStarch now at a similar price to soya hulls for summer, and just a £10/t premium for the winter.”

Sweetstarch image
Sweetstarch is a great value alternative to rolled cereals for energy supply.

UK-produced alternatives

A drop in the wheat futures price has been one contributing factor, along with subsequent lower demand as farmers switched to feeding – rather than selling – home-grown cereals. But with demand now increasing, and prices this time last year closer to £175–185/t, the advice from Ms Bradley is once again to start booking requirements soon.

“It’s also worth looking at UK-produced feeds like NovaPro heat-treated rapeseed expeller, which supplies similar levels of rumen-bypass protein as in soyabean meal, but for a significantly lower cost per tonne. It’s also unaffected by exchange rate fluctuations, and with rapeseed values falling due to reduced demand, it’s a great option to help cut overall feed costs.”

* Prices correct at the time of writing and subject to change. Unless otherwise stated, all prices quoted are for 29t tipped bulk loads delivered on-farm within 50 miles of origin.

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