Inside: Milk & Food
2 times why the price of concentrated dairy cattle is rising
Concentrate feed prices for dairy cattle are slowly leaving the lowest point behind. Not an unusual development at the beginning of the year. At the same time, it also means that watch out for further increases. An analysis of Boerenbusiness Feed outlines two reasons that are causing the price to rise, but also gives one that can give some relief later in the season.
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The other pellet types show varying developments. Rosé calf chunks increase slightly in price to 25,50 euros per 100 kg and beef bull chunks increase to 23,25 euros per 100 kg. Remarkably, the pluses in the prices of pork chunks are much greater.
The first reason that the increase in prices for concentrates intended for dairy cattle does not come as a surprise is the phosphate reduction scheme. One part of this is less phosphorus in concentrates. CBS will release the first report in the foreseeable future. Something that will happen monthly. This examines the progress made in reducing phosphate production.
The aim to use less phosphorus in feed makes the use of rapeseed meal more difficult. A product known to stimulate higher phosphate production. Soy meal is a more expensive protein supplier, but it guarantees less phosphate. It is likely that there are more raw materials that are more difficult to use in the context of phosphate reduction and therefore have an upward effect on prices. A topic that will remain topical throughout 2017.
The second reason also comes from the protein front. Soybeans have shown an upward trend in recent weeks. This is under the influence of successful exports and 'technical purchases'. Not only soybeans became more expensive, the price of rapeseed is also increasing. Which probably indicates a tighter supply and could have consequences for oil extraction from rapeseed and therefore the available volume of scrap. This means that the prices of protein and those of concentrates will follow suit. Where wheat remains relatively cheap and grain maize only very slowly increases in price.
A trend that can provide some breathing space is the development of livestock. Livestock herds declined in both Germany and France. Spain has taken over as the largest producer of compound feed, but this is mainly due to a larger pig herd. Now that the Netherlands is also aiming for fewer livestock, it is realistic to assume that the demand for concentrates in Western Europe will decline. This could result in lower prices in the course of 2017.
More feed prices and historical development
