Volatility leads to murky feed outlook

Poultry farmers should spread their feed purchases to reduce their risk as they face a murky price outlook over the coming winter, say feed compounders.

Tony Bell, from BOCM Pauls, advised producers to “do your buying little and often to try and average it down,” while Peter Miller, managing director of Vion Food’s poultry division, said it would be a “brave man” who went for volume purchases.

Raw material prices have certainly trended upwards in recent weeks, but the market still holds significant volatility.

Paul Poornan, feed mill chief executive at Humphrey Feeds, said that in 2010, former Soviet Union (FSU) nations produced 81m tonnes of wheat and exported 14m. This year they are expected to produce 107m tonnes and export 33m tonnes.

“That’s one heck of a change which could have quite a bearish influence. But the question is what happens in the USA with maize?”

Mr Miller agreed that poor growing conditions in the USA were causing fluctuations in prices. “The maize crop is being affected by very hot weather and feed producers in the States are moving into wheat, which is not normally what they use, particularly in poultry, and that’s causing a problem,” he said.

Soya prices are also being pushed up by weather in the USA, despite there being adequate stocks to supply the world market. And with Brazil increasing its GM soya plantings to 83% of the planted area, feed manufacturers are expected to have to pay an even higher premium for non-GM supplies.

• Let us know your view on making volume feed purchases on our website forums