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Raw material sourcing issues prompt feed price volatility

Feed market volatility has seen prices hike in recent weeks, with some farmers reporting increases of £25/tonne at the start of April.

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Raw material sourcing issues prompt feed price volatility

Analysts cited sourcing pressures of raw materials, such as palm kernel and soya as a contributing factor, with panic buying also driving prices up.

 

Andrew Willis, global combinable crops market analyst with KW Alternative Feeds, said: “Most of the palm kernel is sourced from Indonesia and Malaysia, where crushes have been understandably closed to ensure the safety of those workers.

 

“Likewise in South America, port strikes have prevented soya being imported to Europe.

 

“Clearly, price is very much a function of market psychology at times of uncertainty and perceived shortages.”


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Supplies of mid-proteins have also been impacted negatively due to the lack of demand for the core product.

 

“With falls in crude oil prices, demand for bio-diesel, in which rapeseed oil is used, has been reduced significantly.

 

This has resulted in a tightening of rapeseed meal and dried distillers’ grains availability,” Mr Willis added.

 

Looking closer to home, reduced brewers grain availability, following demand reductions for cask and keg beers due to the closure of bars and restaurants, has created further challenges for the sector.

 

Tighten

 

However, despite some tightening in the supply channels of feed ingredients, industry experts remained ‘optimistic the sector has navigated the low point in supply’.

 

Mr Willis added: “As social distancing measures are eased, we expect those product supply chains which have been particularly affected to improve.

 

"It is unlikely we will see further deterioration in the marketplace as supply chains work hard to become flexible and agile during the Covid-19 pandemic."

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