LU regulation reduces feed and livestock prices

In any case, the increase in FrieslandCampina's milk price was good news. After the minus of 3 euros in January, the months of February and March were able to partly erase this decline. From March 1, the standstill will be replaced by the GVE scheme. This means that where growth was previously discouraged compared to 2016, there is now a high fine for too many LUs compared to October 1. Which involves 240 euros per LU. In addition, a fine of 56 euros applies per LU when looking at the reference of July 2, 2015 minus 4 percent.

Many dairy farmers have already been told by their milk buyers how much they will have to return in terms of numbers of cattle. Some pre-sorting has also been done, which has translated into higher slaughter numbers. Up to and including week 7, the prices of cattle for slaughter remained more or less unaffected, but the quotations from Livestock and Logistics showed at the end of week 8 that the decline had started. Bunnik went along with this on Monday. On average, prices fell by 0,10 euros per kg.    

The supply is only expected to increase further in the coming weeks. This is because the stoppers scheme will also be implemented. It is almost inevitable that it will have a negative impact on pricing. Is it compensated in the milk price? Difficult to say, but the market is anticipating more milk. Unexpectedly less supply can therefore cause intense results and possibly higher prices.

Another element that is included in these developments is the feeding position. In many places, livestock numbers are reduced or the entire herd disappears. Which means that feed is released. It looks like livestock farmers will first see whether they can rely on this. As a result, a wait-and-see market.

This results in a free-farm price of 58 euros per tonne for the price of silage maize. There is a demand, especially in the south. Last year it was mainly a problem to find higher quality products, but this season it is no problem at all. There is starting to be a little more demand for silage grass. The price is 35 euros per tonne free at the farm.   

There is less enthusiasm for purchasing hay. There is talk of sufficient stock. As a result, the price of grass seed hay at the top end, Engels Raai, drops to 115 euros per tonne free at farm. Red and tall fescue move between 135 and 145 euros per tonne. Pasture hay is hardly purchased by dairy farmers. 

Straw remains solid. In France and England, supply is starting to decrease and prices are slowly rising. In the Netherlands, the price in the south of the country for uncut product starts at 100 to 110 euros, for cut it quickly reaches 125 euros per tonne. In terms of price, barley straw is in line with that of wheat. 

Higher prices are recorded in the major commodities. For example, prices of rapeseed meal and soy meal are rising steadily 44/7. Soybeans are recording lower prices close by. This is partly due to disappointing export figures and sales of positions. Afterwards, a firmer undertone is taken into account again. With rapeseed, there is less crushing, which slows down the supply of scrap, while demand remains. What is not cooperating is the euro-dollar exchange rate. A cheaper euro automatically makes the purchases of raw materials more expensive. Wheat and corn are rising slightly in price.       

Which means that local animal feed raw materials beckon to lower prices, but everything from outside Europe has the potential to become more expensive. Which makes local even more attractive. The first reports from CBS indicate that gains have already been made in inhibiting phosphate production through the phosphorus in feed in January. 

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