Hopes for further feed price fall in the summer
With some trade signals that fertiliser prices will remain firm for the coming season, farmers may see less relief than expected from the high input expenditure in all grassland-based enterprises in 2013, which was driven by extra feed use, high feed prices and extra fertiliser applications.
Teagasc had forecast a feed price decline of 10% in 2014 relative to 2013 — which now seems reasonably accurate.
The feed price reductions last autumn were the first in about five years — and there are grounds for farmers to hope prices fall further when protein feed markets settle down in the summer. Feed prices haven’t moved much since November, largely because protein prices haven’t fallen as much as expected, despite a big soya crop in South America.
Record demand from China and a lack of farmers selling in Argentina due to political and economic instability have affected the market.
Feed wheat price trends have also disappointed farmers hoping for cheaper animal feed, with the milling wheat market now dominating, rather than the maize and barley market to which feed wheat prices were previously pegged. Whereas feed wheat used to sell for a €5-€10 premium over barley, it is now running at €37 dearer.
Livestock feed prices have also been affected by the stormy weather which upset logistics and delayed up to 20% of raw material deliveries, forcing millers to change ingredients or replace them, adding to production costs.
Dockside stores were also temporarily inaccessible due to floods, which particularly affected Foynes Port in Co Limerick.
However, there is the hope that record global maize crops, diminished US demand for ethanol, and big South American soya crops will result in feed prices falling further through the summer and autumn. Normal weather in 2014 will also enable livestock farmers avoid the 21% increase in feed expenditure which set back profitability in 2013.
nMeanwhile, farmers will be hoping signals from the fertiliser trade that prices will remain firm for the coming season are short of the mark.
Teagasc experts recently predicted prices could fall 10% to 15% in 2014 across the range of fertiliser products, compared to 2013 — which would bring badly needed relief to grassland-based farmers whose fertiliser expenditure is estimated to have increased by 23% last year.
Fertiliser prices were relatively stable over the last two years, but stayed 70% higher than in the middle of the last decade.
Now, some fertiliser trade sources say that prices will remain firm for the coming season due to Russia reducing exports, and continuing strong demand from China.
But new global nitrogen production capacity coming on stream should limit price rises.
