Falling protein prices open opportunities for farmers to lock in cost savings
Falls in protein prices and a stronger pound could open a window for farmers to lock in cost savings on summer and winter proteins, according to KW feeds.
Alex Black
KW straights trading manager Claire Bradley highlighted Brazilian soyabean harvest estimates had been cut to 116.5 million tonnes, but it was not far below recent highs.
“The Argentine crop is progressing well under good conditions and is on track to produce 54mt, substantially more than last year’s limited 38mt harvest.”
Chinese demand has fallen, reducing overall global demand.
“As a result, US soyabean yearend stocks are set to reach about 24.5mt this year,” she added.
Significant
The impact on soyabean meal prices has been significant, with forward contracts consistently below £300/t for summer delivery and dipping as low as £280/t at some points.
But Ms Bradley said some farmers were still reluctant to commit.
She said prices could go lower but the potential for prices to rise was considerable.
She added taking cover now could help manage risk even if farmers left some scope to take advantage of any further price reductions.
“Just make sure you are being realistic about the overall average price you are aiming for, because current prices are very close to recent historic lows,” she said.
Soya hull prices have also dropped with rapeseed meal prices softening after the resolution of strikes at a European crush plant.
Ensus restarting production has also boosted the supply of mid-proteins although this will only be maize distillers’ feed, which was ‘not as competitive against rapeseed meal’ as wheat.
Ms Bradley added: “Traditional rapeseed meal is also imported, so faces the same risks if sterling weakens.”
However, UK grown rapeseed expeller from Stratford had a higher oil and energy content, and was also good value, with the rumen protected version also worth considering.
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