Farmers purchasing concentrates in a nut or ration form are facing a price increase generally in the region of €10/t. Most feed merchants/suppliers contacted customers in the last week citing that prices were increasing across the board as of 1 December 2020.

The reason given for the increase in price is a tightening in global grain supplies resulting from a combination of lower yield forecasts and a significant increase in the volume of feed being imported by China. There is a particular focus being placed on soya bean and maize production and price trends.

For example, as reported by Andy Doyle in last week’s edition, the volume of trade completed between the US and China for 2020 was forecast to be in the region of 7mt of maize and soya beans but this is now expected to increase to 20mt. Longer-term supply forecasts also point to lower weather-related production in key production areas such as Brazil. This has had the net result of increasing prices in recent months to the tune of €40/t to €60/t.

Farmer reaction

Many farmers who contacted the Irish Farmers Journal were keen to highlight that domestic prices for green barley, for example, were relatively poor this year and that the ingredients used in current feeds being traded were purchased competitively in advance of recent price increases. There is also the other factor of domestic demand being unchanged on 2019 levels, with anecdotal reports pointing to lower numbers of cattle being finished at present.

Merchants argue that the price of all straights and not just maize and soya are increasing. Many have formulated high maize diets on the back of lower prices in recent years and are trying to keep inclusion rates constant. There is an element of the current price increase accounting for increases across all feeds and also allowing for further movement in markets. There is more analysis of current market trends on page 44 this week.

Weanling feeds

Getting back to current prices and sales trends, weanling rations/nuts remain in steady demand following an increase in demand attributed to the Beef Environmental Efficiency Programme in recent months. Standard weanling rations quoted as containing 15% to 16% crude protein range from €255/t to €275/t. Pelleted nuts are typically retailing for €5/t to €10/t above equivalent rations.

These prices are typically for bulk deliveries or feed collected loose in bins with the formulations including minerals. A significant percentage of weanling feeds also continue to be traded in 25kg bag form and this is adding anywhere from €15/t to €25/t on to the cost of equivalent quality feeds while cooked or crunch feeds are quoted anywhere from €330/t to €365/t in bag form.

Steady finishing ration demand

Sales of finishing rations have improved in recent weeks as farmers housed cattle but most merchants report relatively low sales.

Some say they are steady on 2019 levels while others point to a 10% to 15% reduction in volumes traded. Prices quoted by merchants for a high-energy ration range on average from €245/t to €270/t, with very little variation reported between regions.

Again, this price is for bulk deliveries or collections. There is an appetite among merchants to tie into larger sale volumes, with scope to do deals on price or lock prices until the new year. One barrier reported for progressing down such a route is tight cashflow on some finishing units, with returns from winter finishing requiring a continued increase in beef price to return a margin.

Dairy sales steady

Sales of dairy feed are steady, with volumes fed balanced by cows being dried off and higher quantities of feed going into cows which are still milking. Some merchants are still offering a standard 14% crude protein nut in the region of €255/t to €280/t. Volumes trading are reducing and being replaced with a higher protein content nut in the region of 16% to 18% on average. Prices for these feeds are typically €15/t to €25/t higher, with some higher-spec feeds including soya as the main protein source and high energy ingredients ranging from €300/t to €330/t. These prices are quoted for lower volumes, with specialist liquid milking herds and spring-calving herds milking for another few weeks often having access to lower-cost feeds by merit of large volumes being purchased forward or deals completed on a discussion group basis.

Sheep trade boost

There is a wide range in prices quoted for lamb rations and pelleted feeds.

This is being driven by a significant variation in the ingredient inclusion rate and the manner in which it is traded.

The average prices quoted for standard cereal-based feeds range from €250/t to €285/t for bulk purchases to €280/t to €330/t for sales in 25kg bags.

Sales volumes and payment terms again have an influence on prices negotiated, as does the volume being purchased. Similar to weanling rations, cooked or crunch rations are significantly more expensive at a range of €330/t to €370/t if traded in 25kg bags.

There is some interest building in ewe and lamb nuts as early lambing flocks enter late pregnancy.

Prices reported for 18% to 20% crude protein rations range anywhere from €290/t to €340/t on average.