A few months ago, bulk prices started to pick up again, but now a cautious decline has started again. Compound feed prices are thus responding to the drop in wheat prices, although soy is on the rise.
Both cattle and pig feed became cheaper in December, according to figures from Wageningen Economic Research. The price of A-brok fell from €381 to €379 per tonne. A limited decline, but a change in trend. After all, cattle feed still increased in value in November. The same applies to pig feed, which also decreased slightly in the last month of 2022. Pork chunks for meat decrease from €405,50 to €401,50 per tonne. Sow and piglet feed also became slightly cheaper.
Cheaper wheat
Bulk prices benefit from cheaper wheat. From mid-October onwards, wheat prices fell quite sharply. The French futures market Matif was still trading above €350 per tonne in mid-October and even briefly fell through the €300 mark in mid-December. In the meantime, wheat is trading above that psychological limit again, with a somewhat erratic price development. This is partly due to the corona unrest in China. This also affects soybean prices.
Chinese demand for soy is expected to increase when the economy fully reopens. It hasn't gotten to that point yet, but the market is certainly preparing for it. There has been an upward trend for some time, prompted by drought in Argentina. In Chicago, soy rose to above $550 per tonne last month, the highest level since late August.
Market expectations
In the chunk price development, wheat weighs considerably more than soy. In theory, a further decrease in pellet prices is therefore possible, as shown by the compound feed price indicator fattening pigs en a-brok. However, whether compound feed companies will hasten to reduce pellet prices is another matter. This is partly due to the high energy costs and loss of margin in 2022 when the raw materials markets rose rapidly. Margin losses are often corrected afterwards, although the market is quite competitive due to the shrinking livestock population.