Winter feed prices set for big price rise in tight market

Compound feed prices are expected to rise by between £25/t and £40/t for winter deliveries between November and April.

This would put an 18% protein high-energy dairy ration in the £240-£250/t range for bulk full loads for an average 150-cow herd.

Energy feed costs have risen the most, with barley worth just £5/t less than wheat.

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However, with some northern and Scottish barleys looking like they might not make malting grade, feed barley prices could lose some ground in future, widening that gap again, suggested Thomas Baines-Sizeland, feed business manager at AF Group.

Most feed ingredients are available but not plentiful.

The protein market has seen prices reduce slightly in the past few days (midweek), with HiPro soya at £320/t-£325/t delivered spot and no increase for October.

The US soya harvest is set to rise to a record 366m tonnes and US-China trade issues are putting pressure on prices. Having said that, the weak pound is adding price pressure for feed buyers here.

Rapemeal, by contrast, at £240-£245/t spot looks expensive against soya.

The price and supply squeeze is turning farmers’ attention to alternative feeds such as co- and by-products – but these are increasingly being sent to in-house AD plants by their producers, for example by Scottish distillers and potato processors.

Brewers draff grains are costing £43/t-50/t, also in a tight market and about £10/t up on a year ago.

British Sugar this week released its first limited allocation of beet pulp feed which was snapped up almost immediately and looks like being priced at about £220/t-£224/t on to farm from November, about £40/t more than a year earlier.

There is uncertainty about the supply of distillers’ dry and wet feed from the northern bioethanol plants, with one of these widely rumoured for a maintenance shutdown in the next few months. This would disrupt supply of a valuable alternative feed.

AF Group supplies feed nationally and Mr Baines-Sizelands has seen a trend to more farmers using unmineralised blends supplemented on farm with bought-in minerals, saving on compounding costs.

The use of molasses with straw is also increasing, although Mr Baines-Sizelands cautioned against high-protein molasses for sheep.

He also said the high price of raw material and the market volatility meant some compounders were unwilling to quote prices beyond January.

Farmers could book tonnage with the price to be agreed later, but not many were taking up this option.
“Most are holding back from committing to winter tonnage at present,” he said.

Another feed supplier, based in the north-west, said that as well as high raw material prices, compounders were seeing big increases in fuel bills and other running costs, while driver availability was a real issue in some areas. This was all adding to feed costs.

Feed market factors

High wheat, barley and maize prices are keeping energy feed costs up:

  • Barley-wheat price gap could open up again as the extent of barley malting quality potential becomes known.
  • Record world soya harvest predicted – 366m tonnes – helping to keep a lid on protein price rises.
  • Weakening pound raising prices further for imported raw materials.
  • Record world maize production – but increased production will be outweighed by a bigger increase in consumption.
  • AD plants taking an increasing tonnage of material such as distillers grains and vegetable waste which in the past would go into livestock feed.
  • Rapemeal looks an expensive protein source compared with soya.
  • US-China trade issues weigh on market, in general depressing soya prices but also giving potential volatility.

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