After almost two years, compound feed prices are moving down again. This puts an end to the price recovery that has been particularly strong in recent months. There is also room for a significant correction in lump prices in the coming months.
In July, the price of fattening pig chunks fell by €1,10 to €42,90 per 100 kilos. The price of Standard Chunk A declined more slowly, dropping $0,30 to $39. Other cattle and pig feeds also fell in price, according to figures from Wageningen Economic Research (WUR).
Trend break is no surprise
The turnaround in the feed market does not come as a surprise, but it is probably no less welcome for livestock farmers. As a result of the war in Ukraine, grain prices have risen to unprecedented heights in recent months. At its peak, mid-May, wheat cost €425 per tonne. The forward quote on the Matif in Paris went even further than that. In the meantime, grain prices have come down considerably. Wheat, which is an important component in many kibble compositions, has been trading below the €350 per tonne level for a few weeks now. From that point, the price goes up and down. The ongoing drought in Northwestern Europe is a price-supporting factor. The grain deal between Russia and Ukraine is depressing the price, although its implementation is going in fits and starts.
The cereals are now in the final phase of the growing season in the northern hemisphere and are sometimes already being harvested. Where the first yields still seemed above average, this is now quite disappointing in Europe. The average wheat yield in Europe is below the five-year average, according to the harvest forecast. This slows down the wheat price decline. At the same time, the consumption of wheat is also under some pressure worldwide due to the economic downturn.
Price drops up to 10%
On balance, there is room for declining lump prices in the coming months. Quite a lot of space in fact. The compound feed price indicator of Boerenbusiness provides for meat pig chunk up to and including December a price decrease of 8,6%. The cattle feed can even drop by about 9%. The extent of price increases will be limited or broadened by the development of grain prices in the coming weeks. The final phase of the growing season will be crucial.