Potential feed market volatility ahead, but opportunities arising*

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Length: 435 words; 2-3 minutes

Ripe soyabean pods image

Protein feed buying remain a key focus for many at the moment. The closure of the Vivergo bioethanol plant in Hull at the end of September will cut annual British wheat distillers’ feed supply by around 250,000t, whilst extra feed demand during the summer’s drought has reduced supplies for those still needing to cover winter requirements.

“The good news is that a switch back to oilseed rape – from soyabeans – by some of the larger European crushers has improved the supply and price of rapemeal,” states KW straights trading manager Claire Bradley. “The need to compete with other protein meals has also helped push prices lower, to around £220-230/t for the winter.

“But a lot of uncertainty remains, particularly regarding the North American soyabean crop. Harvest is now underway following a season of good growth, though recent reports of wetter weather did cause prices to lift slightly – expect more volatility before harvest is complete.”

Soyabean export uncertainty

The US soyabean crop is expected to yield around 128 million tonnes (mt), compared to 120mt last year. However, the ongoing trade war between the US and China means that the demand side of the equation is less clear, with a sustained period in late September and into October during which there were no soyabean exports to China, compared to strong sales in previous years.

“…continue to offer better value than soyabean meal for rumen-bypass protein.”

“What impact this might ultimately have on the balance between North and South American soyabean exports, global prices or UK soyabean meal supply remains unclear,” Ms Bradley continues. “Fortunately, there are still good supplies of the alternative high quality proteins, and they continue to offer better value than soyabean meal for rumen-bypass protein.

UK-produced NovaPro is a highly cost-effective source or rumen-bypass protein.

“ProtoTec heat-treated rapemeal and SoyPass rumen-protected soyabean meal are still good options, and have recently been joined by the UK-produced hot-pressed rapeseed expeller, NovaPro. It’s got a similar digestible undegraded protein (DUP) content to soyabean meal, yet at the moment costs 14% less per tonne, so is equivalent to buying soyabean meal at £32/t below current prices.”

Energy feed volatility

The wheat market continues to be volatile as adverse weather affects crops in key growing regions, particularly Russian (typically the world’s cheapest seller of cereals) and Australia (where there’s been frost). Farmer selling in the UK remains slow, adding to the price pressure.

“The alternatives are faring better, with wheatfeed prices recently dropping around £20/t and soya hulls approximately £10/t lower than recent highs,” Ms Bradley adds. “The various biscuit meals and confectionery blends such as SweetStarch and SugaRich Dairy also continue to sell well, offering a much better balance of energy release than cereals.”

* 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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