Lower straights feed markets enhance margins on farm

Straights feed markets have dropped back by more than 20% on year earlier levels this summer, with lower feed costs helping to improve margins for livestock and dairy farmers.

Rape meal was down by more than £100/t to average £260/t in June, according to Defra figures, while maize gluten meal dropped by £80/t to £228/t and HiPro soya bean meal averaged £375/t, down £60/t on the year.

Analysts at Kelly Consulting said straights markets had been through a number of significant swings in the past few months, which had allowed for buying opportunities at certain points.

See also: Straw trading at £120 an acre with demand due to stay high

The firm said: “Globally, soya stocks are good, with good yields being reported from South America. Weather was a significant concern in the US until recently, where changing weather patterns have improved crop yield.

“The same cannot be said for rape meal. Harvest has been challenging, with wet weather across the EU, and yields have been somewhat average.

“That being said, prices have reduced slightly in the last two weeks, which has created a buying opportunity.

“We are recommending that clients take cover until the turn of the year at least, with further cover being taken until April in some cases.”

Concentrate usage per litre averaged 0.3kg/litre on dairy farms nationally in May, according to data from independent dairy specialists Kingshay, with concentrate averaging £310/t.

This resulted in an all purchased feed cost of 9.93p/litre, down by 8% on year earlier levels, which helped to improve margins on farm.

Spot prices collected on 31 July by Farmers Weekly put feed wheat at £176.5/t and feed barley at £144.5/t, while feed peas and beans averaged £245/t and £241/t respectively.