Compound feed prices are rising due to higher raw material and energy costs, although the wheat price is now under pressure again. Read more about the development and expectations regarding compound feed prices.
In March, feed prices rose for the fourth consecutive month. A-feed increased by €2 to €298,50 per ton. Finishing pig feed rose by €2,50 to €280,50 per ton. Sow feeds also became more expensive. This is evident from figures provided by Wageningen Social & Economic Research.
Volatile grain market
The rapid rise in grain prices, resulting from the war in the Middle East that broke out last month, is not yet fully factored into compound feed prices. Wheat recently rose on the Matif from €195 to over €210 per ton, but has since fallen back to its previous level. A rebound also took place in the physical market, where the price decline has not yet set in, with a wheat price (EU Rotterdam) of around €215 per ton. On regional exchanges, however, wheat is showing a cautious decline again.
The decline in the physical market may continue in the coming weeks, as the market has little fundamental support. From the Wasde-report Ending stocks increased significantly last week. In addition, good harvests are expected in the European Union, including in France. For the time being, analysts are counting on falling wheat prices on the futures markets to possibly below €190 per ton. Various compound feed companies classify wheat as a buy. Compared to the relatively expensive grain maize and also barley, this is justified.
However, the question remains to what extent the wheat price can bring relief to the compound feed market. Soybeans have recently weakened somewhat after a peak rebound, but at $430 per ton, they are considerably more expensive than in the second half of last year. In the WASDE report, ending stocks were reduced, and demand for soybeans (oil) may increase due to sharply rising fuel prices. Consequently, the soybean market has a solid floor.
Increased energy prices
Moreover, the sharply increased prices for gas and diesel also affect the cost price of compound feed companies, which is passed on to concentrate prices one way or another. In combination with the increased physical prices of grains, further price increases for compound feed remain likely in the coming months, despite the fact that wheat prices on the futures markets are back to square one and show a weak undertone.
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