Grain prices for animal feed under pressure in Australia
Prices of grain for animal feed in Australia have fallen sharply in the past month. This has to do with developments in production, both domestically and globally.
The global market for grains for animal feed is under pressure due to a large harvest expected in the United States (US). Farmers in the US are looking forward to a problem-free season so far, Australian agricultural company Elders said in a report. The US Department of Agriculture and International Grains Council have revised upward their forecast of expected production.
In particular, a large corn harvest and increased exports in the US are causing lower prices worldwide. Some analysts expect that grain prices for animal feed may recover somewhat due to disappointing results from the corn harvest in South America. That would boost demand for US corn and support prices.
Buyers there are not in a rush to purchase grain for livestock feed right now.
‘No rush for purchasing’
In Australian media, Tom Taylor, operations manager at Clear Grain Exchange, emphasises that domestic results are currently disappointing. “Prices, especially for barley, are now levelling off after peaking in May,” he says.
In addition to international factors dampening demand for feed grain, there is a seasonal change with rain in New South Wales and parts of Western Australia. This weakens the impulse of livestock farmers to stock up on grains. “Buyers there are not in a rush to purchase grain for livestock feed right now,” Taylor said.
Justin Fay, product manager at Reid Stockfeeds, says the price of wheat and barley has fallen by more than $9 per tonne in recent weeks. Barley for feed is currently trading for over €203 per tonne. The price of wheat for feed is currently over €212. Farmers who want to boost their feed supply with legumes actually pay more because prices have risen thanks to strong export demand.
Better times for sorghum and barley
Australian farmers growing sorghum and barley for animal feed are likely to see an improvement in the coming months. Because China has removed high tariffs on barley from Australia, supplies in Australia itself are now limited. In addition, the number of cattle is large and barley is often the preferred feed, especially in the summer months. In Australia, summer starts on December 1.
Things are also not looking good for farmers who grow barley for animal feed in South Australia, one of the most important states for barley. The harvest is expected to be disappointing due to a lack of rain. In addition, many farmers have chosen to grow legumes instead of barley because the yields are currently higher.
