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Grain & Feed Outlook – Philip Lynch, R&H Hall
Politics, tariffs, currencies and of course weather have ensured a challenging time in global grain markets. Despite a slightly lower global harvest, corn remains extremely competitively priced against other grains and non-grain feed ingredients. With disappointing Irish wheat and barley harvests, in a year of significantly higher feed demand, corn has continued its dominance as the main feed ingredient in ruminant rations. We expect grain markets to remain supported around present levels. However we must be cognisant of the times we live in, particularly the heightened sensitivity of grain markets to political interference and this will ensure a volatile path ahead.
Of course, price uncertainty is unfortunately only one of many challenges facing Irish livestock farmers this winter. Even in normal times, the Irish market has a significant feed ingredient import requirement. Depleted forage supplies will ensure a significant increase in concentrate feed requirements from the ruminant sector in the months ahead. Securing adequate supplies of necessary feed ingredients and the logistics involved will be a recurring theme over the coming months.
The logistics of shipping large volumes of feed ingredients and the delivery times involved are under the microscope more than ever. With delivery times from the point of sailing up to 4 weeks for some of the most popular straights, (see table 1), there is always scope for supply issues to develop in the event of a sudden spike in near term feed demand. The industry has responded quickly in securing additional volumes of ingredients for the winter ahead but who knows how much is enough?
An added challenge we are facing is competition from other countries in Northern Europe experiencing drought related challenges which means they are in the market for greater volumes of the same ingredients the Irish market requires. This is a major reason for the sharp increase in straights prices in recent times. Given the demand outlook ahead, prices are unlikely to drop significantly from present levels. In this scenario it is advisable to cover your feed needs for the winter ahead if already identified.
Table 1: Sailing times of selected feed ingredients
|Ingredient||Major Origins||Sailing Times|
|Maize||EU, Black Sea, Canada, Brazil||5-21 days|
|Soya Hulls||Argentina, US, Russia||12-23 days|
|Corn Gluten/Corn Distillers||US||14 days|
|Palm Kernel||Malaysia, Indonesia||26 days|
|Soymeal||Argentina, US||12-23 days|
|Beet Pulp||EU, Russia, US||3-12 days|
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