Compound feed prices have been falling—with occasional minor upticks—for over three years. However, the question remains how long the downward trend will continue, now that many commodity prices have started to rise again. Soybeans, in particular, have become significantly more expensive in a short period.
The price of pork feed fell by €3,50 in October to €277,50 per tonne. The price of standard A feed fell by only €2,50 last month to €293,50 per tonne. Figures from Wageningen Social & Economic Research (WSER) also show that prices of other cattle and pig feeds have also become cheaper.
turnaround
The prices for lumps are thus responding to the falling wheat prices of recent months. However, a turnaround has been observed since the beginning of September. On the Matif, wheat is making a cautious recovery, with prices around €195 per tonne. In the physical market, the price level is even higher at €207 per tonne for EU wheat, and there is also an upward trend. The same applies to barley and maize. The recovery is due to renewed buying interest and that raises the bottom in the grain market to higher levels. However, global wheat stocks still exceed consumption.
Soybeans considerably more expensive
Recently, the price of soybeans in Chicago has also risen sharply to over $400 per ton, the highest level in a year and a half. This is because China has recently resumed buying American soybeans, now that the tensions between the two superpowers have cleared somewhat after the meeting between the presidents of both countries. The US claims that China will import significant volumes again in the coming years. In addition, soybeans may become more expensive due to the European Deforestation Act which will probably come into effect next year.
When soybean prices rise, so do the prices of derivatives like scrap and hulls. Both are used in both cattle and pig feed, albeit in limited quantities. The impact of feed grains like wheat and barley, as well as corn, is greater. These are the main ingredients, currently making up to 30% of pellet composition.
Compound feed price indicator
De Compound feed price indicator van Boerenbusiness anticipates further price declines until the turn of the year, but not after that. Typically, there's a two- to three-month lag between commodity markets and farm gate prices.