Farmers purchasing concentrates are facing further upward price pressure with a number of suppliers already adding another €10/t across their range of products. While others who have not yet increased prices are notifying farmers that they will be following suit imminently. This price rise follows an increase of €10/t introduced by all suppliers in December.
Feed merchants/suppliers are citing a continued increase in price in commodity markets driven by increased global demand and a reduced level of supply.
Many merchants comment that a price increase has been on the cards for quite some time but was delayed by the fact that ingredients were bought forward, which allowed them to limit the price increase up to now to in the region of €10/t to €20/t.
The increase in price has occurred across all feed ingredients. For example much of the maize compounders used over the last six months involved maize that cost in the region of €170/t ex-port.
The replacement cost of the maize purchased since Christmas is in the region of €240/t. Likewise soya bean meal bought forward last year cost around €350/t ex-port but this increased quickly and rose to nearly €450/t in mid-October.
The strikes in Argentina in December led to supplies temporarily being limited further with prices reaching as high as €550/t at the height of the supply shortage. Ships have begun to arrive with supplies of soya products from Argentina and this should help to alleviate recent supply pressures. It is expected that soya bean prices will fall back this month as supplies in the market rebuild, but the price is expected to settle at the previous level in the region of €450/t rather than falling any lower. Closer to home native wheat has risen from the mid-€190s to around €240/t while barley increased from a baseline of €170/t and is now trading in the region of €210/t. These price increases have been mirrored across all other feed ingredients on the back of exceptionally high demand.
This demand has been driven in particular by exceptional and unpredicted demand from China.
The forecast recovery in supplies of soya bean meal is coming at the right time for the sheep sector with sales volumes of high-protein feed starting to increase as mid-season flocks enter late pregnancy feeding. Prices reported for in-lamb ewe rations or pelleted concentrates with a crude protein content of 18% to 20% range from €290/t to €350/t. Farmers should take note of the source of protein used with soya bean meal remaining the optimum feed ingredient protein source for inclusion in late-pregnancy diets.
The price of standard cereal-based rations for finishing lambs ranges from €255/t to €295/t on average for bulk purchases.
Again, farmers should take note of the minerals included at the lower prices quoted. These costs are anywhere from €15/t to 30/t higher for feeds sold in 25kg bags as opposed to bulk collection or delivery.
Beef and dairy sales
Sales of beef rations have been steady but at a lower level than recent years. Some merchants report there was a slight increase in sales volumes in December.
Prices quoted by merchants for a high-energy ration range on average from €250/t where high volumes are trading hands to €270/t to €290/t at the higher end of the price range. Again this is for bulk deliveries or collection and there is not huge variation reported between regions.
Standard weanling rations quotes as containing 15% to 16% crude protein range from €265/t to €290/t on average. Pelleted nuts are typically retailing for €5/t to €10/t above equivalent rations. These prices refer to bulk delivery or bulk collection.
There is a continued focus on payment terms given the vulnerability of winter finishing systems with merchants willing to do deals where payment is up front or within a short timeframe and they are not carrying any risk.
Weanling feeds sold in 25kg bags are again typically €15/t to €25/t dearer while cooked or crunch rations are quoted anywhere from €335/t to €380/t in bag form.
Sales of dairy feed are increasing slowly which is not surprising given calving is kicking off. Many grass-based systems are using a standard high-energy feed and not overly concerned with the protein content.
Prices quoted for a standard ration or nut range anywhere from €255/t for a low-spec mix to €280/t.
Dairy feeds with a higher protein content of 18% to 20% are also moving in higher volumes and are being utilised in systems where cows are not likely to get to grass for a significant period of time.
Prices reported here range anywhere from €280/t to €330/t with volumes traded and the producer-supplier relationship having a significant influence on prices negotiated.