Our latest Farm Inputs Overview document, published in early December, gives information about the feed outlook, labour prices, straw costs and the weather. A summary of key feed market influencers is shown below:
Our monthly feed market commentary is found below. For more regular updates on the cereals and oilseed markets, please see the Cereals & Oilseeds section of the AHDB website.
Over the last month, UK grain prices have generally firmed, supported by the ongoing delays to domestic drilling of winter crops. However, the result of the UK general election has seen the value of sterling firm considerably against both the euro and the dollar, reducing prices towards the end of the month.
In the last month, the release of the UK cereal supply and demand estimates highlighted the high volumes of wheat, barley and oats that are in the domestic market. The large stocks of all three of these crops will limit price rises on the back of delayed drilling.
As the window of opportunity for winter planting reduces, there is an increased likelihood of a switch to spring planting. If plantings are dominated by spring barley then we could yet see further pressure for this well-supplied market.
In the global market, maize prices had been under pressure for most of the month on the back of increased global supplies. However, with the US and China reaching an agreement over their trade dispute prices have surged in the past couple of days. Global wheat prices have also reacted positively to the news, with Chicago futures extending recent, new crop concern, delays.
The latest release of GB animal feed production data (including integrated poultry units (IPU)) shows that total production of feed is down 4.8% year-on-year. The reduction reflects the increasing need for compound feeding last season in response to the drought. Production of feed for pigs and poultry (including IPU) remains up on the whole, although there is a reduction in pig growing feed.
Barley inclusions in animal feed production are up year-on-year (6.9%), to October, while inclusions of wheat (-3.9%) and oats (-25.5%) are down. For barley, this is a marker of the low price of barley relative to other feed ingredients.
Oilseed prices have continued to rise over the past month. European rapeseed prices have jumped considerably, responding to high prices for vegetable oils. UK prices have followed the gain in EU futures but have been limited by the rise in the value of sterling.
Soyabean prices had been under pressure since mid-October, responding to the overwhelming pressure of global supplies in the face of limited Chinese demand. However, with China and the US reaching a “phase one” agreement in their long-fought trade dispute, prices have firmed.
Furthermore, ongoing dryness in Argentina threatens to delay soyabean plantings and impact the size of the crop.
With a shortage in domestic oilseeds, this season the UK has imported a high volume of soyabeans, soyabean meal and rapeseed. The primary origin of imports of soyabeans and meal is South America.
Following the results of the general election, the value of sterling has risen considerably, closing on Friday 13 December at £1=€1.1987, a more than three-year high. As we move towards the end of January and the Government’s deadline for leaving the European Union, the path of sterling will be pivotal to movements in domestic markets.