Feed prices for poultry producers should continue to fall, as bigger cereal harvests around the world start to come in.
Addressing a meeting of the Severn Valley Poultry Discussion Group, director of Humphrey Feeds, Martin Humphrey, explained that a number of factors had combined to drive wheat prices lower already.
Chicago fund holders had been selling off their long holdings in anticipation of the weaker market. Most EU member states were looking at larger crops than last year. And the UK had a bigger-than-expected carryover of old crop.
“It was not that long ago that wheat was about £190/t. It’s now delivered to the mill at about £165/t. So you can see the impact straight off,” he said.
“Sit on your hands for the moment if you’re looking at buying.”
Martin Humphrey, Humphrey Feeds
Humphrey Feeds had already passed on some of the lower prices to customers, but there was inevitably a delay as grain that had been bought forward at higher rates had to clear the system.
“Most people have cover through July, but compounders do not have much cover into new crop. So we should be getting into those new crop lower prices pretty soon,” Mr Humphrey told the meeting.
“August is always an awkward month,” he added. “We booked stuff from France ages ago because we could not afford to run out. But from September you should be on to much lower new crop prices. Sit on your hands for the moment if you’re looking at buying.”
But he also highlighted problems with the Brazilian soya crop. Despite a much bigger harvest in the first half of the year, logistical problems were still choking supplies. “That constipation is keeping the soya price at the thick end of £100/t higher than it should be. What we need is that soya price to come back as well.”
Mr Humphrey also indicated that pullets would be getting cheaper. “There is always a time lag in that one. It depends very much on where your flock is in production. But within a few months it should be coming down.”
For a more detailed analysis of the feed market, see the August issue of Poultry World