Protein prices remain volatile

Those looking to secure feed supplies for next winter may be in for a waiting game, as protein prices continue to rise rather than ease, says The Dairy Group’s Chris Savery.

With soya prices between £310 and £320/t compared with about £250/t last year, the continued volatility, complicated by exchanged rates, means buyers have to remain alert.

“Many farmers will be looking at forward-buying feeds soon, but it’s difficult to see when there will be a turnaround. This may result in some producers buying spot to secure current needs and this is where it is necessary to know what your requirements are,” he says.

But while people are still dealing in soya at these prices, unpredictable factors such as the weather and harvests in North and South America mean it’s unclear where prices will end up.

KW Feeds’ Colin Shepherd says continuing demand from China and export restrictions in Argentina, along with reports of lower soyabean planting in the USA and a smaller Argentinean harvest than expected, are the main factors putting pressure on supply.

“Given the current pressures its likely soya prices will remain about the £300/t mark for the next six to nine months, with prices not expected to come down until October after plantings in South America.”

High soya prices are expected to remain for a sustained period, so now is the time to look at changing rations as stock are being turned out, says Mr Shepherd.

“Although high soyabean prices continue to drive the price of other protein feeds, there are other lower-cost alternatives. Rapemeal is an attractive option in comparison, and distillers’ pellets also remain competitive at about £160/t. Protected proteins like SoyPass and Prototec are also providing savings as replacements for soyabean meal,” he says.

But a narrow margin between the 26p/litre to produce milk, including feed costs, and the current milk price means it doesn’t stack up well against what’s being paid, says Mr Savery

“Financially, soya and rape have always been a better buy and this has often been taken for granted. Maybe now’s the time to start looking closer to home for alterative protein sources such as home-grown peas, lupins and beans to remove market volatility.”

But despite protein prices remaining high, now is the time to be forward-buying energy, as the market is “at or close to the likely low point” says Mr Shepherd. “As the summer progresses increases are expected, so it’s best to take at least 50% cover for the winter and then top up when other opportunities arise.”

Sugar beet pulp, citrus pulp, distillers’ grains and soya hulls are more reasonably priced than proteins, with soya hulls about £100-105/t. But as prices are expected to rise with demand in midsummer, now’s the time to buy, says Mr Shepherd.

Distillers’ grains, either from the UK or the EU may also be worth looking at as a good energy and protein source, comments Mr Savery. “Although prices are high, with more distillers’ products expected to come from Europe after harvesting, the cost for a good energy and protein source could drop.”