The new decade has started with a significant hardening of prices across a range of feed materials.   A combination of technical factors are in play and will inevitably drive up ration costs in the coming weeks.

Wheat has been the major mover with the effect of heat and fires in Australia, and the wet weather in Europe causing concern about global supplies. Expectations are for the English wheat harvest to be much reduced in 2020 - with autumn plantings down by 30% England is likely to be an importer rather than an exporter of wheat in the next year. Prices have moved up by around £30 per tonne since harvest as farmers have been reluctant to sell with a shortfall expected and the market still rising.

Harvesting Wheat.

Maize is also enjoying a stronger trade – gaining around £20/tonne - with Ukraine the only competitive supplier until the Brazilians come back to the game. The South Americans have a new friend however as China has had to find alternatives to the USA as a source of feed materials. China is also a bigger buyer of meat and animal proteins to fill the gap left by the decimation of their national pig herd. The increased interest in Brazilian beef is creating a demand for maize from the local feedlots which could reduce the tonnage for export. Maize stocks are still strong in the USA but the material offered for export is of poor quality and with issues around genetic modification it is not attractive to European buyers.

Barley remains the poor relation following a big harvest last year - but it too has benefited from the rising tide of grain prices - gaining around £15/tonne in recent weeks.

On the protein side it is the mid-proteins which are presenting the biggest challenges. Availability of the US corn by products is tight and prices have been forced up as buyers compete for limited supplies. Poor margins for US ethanol producers has led to plants scaling back their throughput and reducing the volume of distillers grains produced. European ethanol producers are enjoying better times however and European distillers are making up some of the shortfall from the USA.

Rapeseed has also been in short supply on the back of reduced European plantings last year and access to Canadian supplies has been hampered by increased use of genetic modification in that region. A tightness in the availability of soya hulls from Argentina – increased demand for palm kernel from New Zealand and Australia due to drought and South America’s  increasing focus on China are all adding to the challenges for our local traders and importers at the moment.