Inside: Feed market
What does a stronger euro do to the feed price for pigs?
For the month of August, the prices of all pig feeds look downwards. The reason? A lower wheat price, which in turn is influenced by developments in the foreign exchange market. This is evident from figures from Wageningen Economic Research.
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Choose the subscription that suits youThe largest drop is visible in the price of pork chunks, which drops by €0,10 to €23,45 per 100 kilos. The downward trend is expected to continue, according to the report Compound feed price indicator. Lower feed prices are expected at least until February 2018. The dominant feed ingredients in pork pellets are currently wheat and barley.
23,20
euro
Propagators are also seeing feed costs drop. The price of sow fodder pregnancy drops by €0,05 to €23,20 per 100 kilos. The same price drop is visible for lakto sow pellets, which amount to €27,85 per 100 kilos for the month of August. A decrease from €0,05 to €34,50 is also visible for baby piglet pellets.
Wheat down
The price of wheat is under considerable pressure and closed on Monday 4 September at €156 per tonne, approximately €10 below the 5-year average. The undertone of the European wheat market is weak and price trends are pointing downwards.
Historically, the wheat price is under further pressure in the second and third quarters. The wheat price often rises in the fourth quarter. However, it remains to be seen whether this scenario will also hold true this year.
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The price development of wheat on Matif, 2017 in relation to the 5-year average.
Euro-dollar exchange rate determines wheat price
The value of the euro will determine further price movements. Technically, there is no resistance until $1,25. The price is hovering around $1,19 this week, paving the way for an even stronger euro. Should the euro strengthen further, this will put pressure on the wheat price. On balance, it is expected that the animal feed industry will increase the share of wheat in compound feed, due to attractive pricing and an improving barley price.
Because the price of barley tends to look up rather than down and was quoted at €156 per tonne in Rotterdam last week. Both the barley harvest and supply are declining this year. There may even be a negative barley balance in Europe in 2018, resulting in rising prices.