Soil not yet in sight for price beef chunks

In July, the price of silage maize core chunks fell less sharply than in June and now in August. With a decrease of €0,50, the lump is listed at €33,25 per 100 kilos. This has canceled out the significant increase at the beginning of this year. The price will return to the level of the end of 2018, beginning of 2019. Looking at the raw material prices, it appears that an increase will take place again in a few weeks/months, but this is also confirmed by the Boerenbusiness Compound feed price indicator?

Gentle descents
The other chunks all fall smoothly. The protein-rich chunk and the beef bull chunk are both €0,10 lower at €26,50 and €25,30 respectively. The price drop for the protein-rich chunks remains stable and the beef bull chunks yield slightly more than last month. The standard pellet A and pink calf pellet both reduce the price by €0,05. This brings the standard chunk to €24,25 and the pink calf chunk to €27,40. All prices are per 100 kilos of chunks.

Outlook
The prospects for beef chunk prices are somewhat striking. Value Boerenbusiness Compound feed price indicator indicates that the price of standard chunk A will continue to decline in the coming months, raw material prices show an upward trend: something that normally manifests itself in the chunk price after a few weeks or months. This is not expected to return yet.

Various reasons can be given for this. The price included is average and depends on the composition of the chunks from different suppliers and the time of purchase of the raw materials by the chunk suppliers. If they have purchased sufficient raw materials at a time when these raw materials were relatively low priced, they can also keep chunk prices low for a longer period of time.

Raw materials
The corona crisis has had a major impact on the development of raw materials. At the beginning of the crisis, prices temporarily fell, after which they rose just as quickly. In the case of (feed) wheat, (feed) barley and maize, a 'dip' occurs again in July. In that month, (feed) wheat is quoted between €165 and €170 per tonne, (feed) barley remains at €150 to €155 per tonne and maize falls by more than €22 to €170 per tonne.

What happened next were significant increases, with the European corn price leading. At the end of July, this was well over €200 per tonne. In that sense, an increase in the silage maize core chunk price would logically be a response. So for now this seems to be on hold. The wheat and barley price is also rising, but less sharply. Both prices increase on average around €10 per tonne. These raw materials are important components for, for example, the standard chunk A, which is why it is striking that this price continues to fall. The right purchasing moment seems to be the cause of this.