Feed prices are likely to remain firm for the foreseeable future, a spokesperson for the Northern Ireland grain trade has confirmed.
The comments come after Moret-sur-Loing, France-based Strategie Grains, said U.S. soymeal shipments to the EU are projected to climb by about 80 percent to 1.2 million tons as Brazil sells more feed to China.
The appeal of U.S. soymeal in Europe has increased as prices fell by almost a fifth since May after China imposed a 25 percent levy on American soybean shipments in a tit-for-tat response to tariffs imposed by Donald Trump’s administration. European wheat prices also rose to a five-year high earlier this month, widening the spread between the two.
The Northern Ireland grain trade spokesman said the Trump effect is the main driver in the current situation.
He added: “His levies on US soya sales to China have pushed the Chinese into looking at South America to source supplies.
“This has pushed up prices in South America and European buyers who traditionally buy from Brazil and Argentina are now looking to America where prices are falling.
“On the grain side European crops are reduced because of heat and drought with barley and wheat in particular commanding high prices.
“Soya is still the most expensive material on the ingredient list by a long way however – and it will not replace wheat in livestock rations,” he added.
“A bumper maize crop in the US is keeping prices competitive there and while American maize is unable to enter the EU (as the majority of the crop is Genetically Modified) the world market price is low relative to the other grains so millers will use as much maize as possible and try to reduce barley and wheat usage.
“Wheat and barley are key ingredients in pig and poultry diets however and there is a limit to how much substitution can be made. We will still have to buy a lot of expensive wheat and barley.
“We are expecting a big demand this winter and there is no doubt that more feed materials will have to be sourced from the global market – a market which has been inflated by weather events in various parts of the world and has suffered reduced availability of some key ingredients,” he added.
“This together with the increased demand from a number of the world’s key livestock producing regions will ensure that feed prices will be firm for the foreseeable future.
“For sterling buyers a weak currency is another factor adding to the cost.”