November 14, 2013
Ireland''s feed prices to drop on strong US soy harvest
Over the coming weeks, a further drop in Ireland''s compound feed prices is expected brought about by the strong yields in the US soy crop.
Compound feed prices to Irish livestock farmers have fallen around €5/tonne (US$6.73) since their peak in early 2013 but further reductions are expected if the US and South American soy harvest can ease supply pressures on the international trade.
Tight supplies of soy have kept the price of this feed ingredient fairly steady at around €470/tonne (US$633) to the farmer, but substitute protein sources such as distillers grains, gluten and rapemeal have fallen by about €50/tonne (US$67) in the last 12 months.
Movement of soy from South America has been limited by logistical problems with boats and the cost of freight from Argentina. This has been another factor keeping a floor in the market for soy and keeping prices up.
The supply of lower protein ingredients such as distillers and corn gluten to Europe has been limited in recent months. The Chinese have been buying up distiller''s grains "like it''s going out of fashion", according to one industry source.
The USDA has forecast China''s soy imports will hit 69 million tonnes in the 2013-14 market year, a 16% increase over the previous year.
US cattle feeders have been switching to feeding corn gluten that would normally be exported to Europe prompted by high soy price. The Chinese have also been soaking up large quantities of rapemeal, resulting in lower supplies to Europe.
However, harvest 2013 for soy in both north and South America should ease the pressure on soy prices and result in lower priced protein feed ingredients too.
The coming six weeks should see cheaper feed ingredients come on stream and help to reduce compound feeds in Ireland, although industry experts refuse to predict by how much.
On the other hand, wheat is trading at around €210/tonne (US$283), while barley is at €185/tonne (US$249) and spot prices for corn are around €202/tonne (US$272).
Meanwhile, figures from Teagasc''s E Profit monitor show that feed costs on cattle farms rose by a massive 31% between 2011 and 2012 as a result of the appalling weather conditions.
Concentrate feed costs rose from €215/hectare (US$289) to €282/hectare (US$380) according to the E Profit Monitor figures.