Shocking straights

By Peter Young

Farmers are getting a shock when they start pricing straights from merchants for the coming winter. Quotes for some straights are up between €20-40 a tonne on last winter.

The higher prices are a knock on from the drought in Europe which reduced crop yields and at the same time increased feed demand. Yields of soyabean were also back in the US where the weakening dollar didn't help the prices of imports into Ireland. Soyabean meal is close to breaking the €300 a tonne on the spot market, rapeseed is €218 a tonne and sunflower is €183 a tonne. Maize gluten has risen to €156 and Distillers which seems to be the best value at present is up to €170 a tonne.

So what can farmers do?

The current spot prices bear little reflection on what you should be paying. Looking back to last summer the forward prices jumped by €30 a tonne for between the end of July and the end of August for some straights. A lot of merchants moved quickly to buy forward up to 60-70% of their winter requirements over this period. Since then straight prices have hardened even more.

Most merchants are using the straights they forward bought in August. That means their 'buy in' price was much lower. I have included in table 1 the range in forward prices that were available to merchants between July and August when prices jumped.

The crunch time will come when they go back out to fill the remainder of their requirements for the winter. Forward prices up to April show no sign of easing. Some merchants I rang are quoting rolled barley @ €138-142; rolled wheat @ €150-155; Soyabean @ €245-255; Distillers @ €160; Corn Gluten @ €145-155;Citrus pulp @ €125-131; Beet pulp @ €135-145.

However some merchants were able to secure citrus pulp forward for under €100 a tonne wholesale. At that price citrus should be available at under €120 a tonne. The majority of Irish beet pulp is normally sold forward in August and September. Deals were done this year for between €115 to €120 a tonne wholesale which means the retail price should be under €130 a tonne.

Farmers who forward bought in September were able to secure these prices. For farmers now it is vital to shop around, buy in bulk (splitting a artic load between farmers is one option) and pay cash. Sugar beet and potatoes are very good value compared to cereals at present. They should be acquired where possible. Weanlings and sucklers can be fed whole beet in limited amounts and finishing cattle can be fed up to 25kg of chopped beet.