KEY feed raw materials have dropped a little since late April, but still remain at historic highs.
Both wheat and soya are showing a net fall from recent peaks.
The ex-farm spot price for feed wheat finally peaked at £332 per tonne in mid-May and has now slipped back to £305/t at the start of June.
Soyameal hit its highest point in April, just touching £500/t, and has since eased back to £488/t.
As a result, the raw material cost for our Basic Layers’ Ration hit a staggering £400/t in May and then fell back to £383 at the start of this month.
Highest prices on record
Any reduction will be welcome news to producers, but in comparative terms, April, May and June have witnessed the three highest months for our layers’ ration on record, and the past six months are the six highest, so there is little useful relief for the poultry sector so far.
Despite the recent softening of prices, the forward price indications are still set on the upward side of neutral.
In the case of wheat, there is an argument that there is nothing that can drive prices higher, but weather worries are now emerging about the northern hemisphere crop away from the Black Sea.
Estimates for the crop in the US are being scaled back, and parts of Europe went short of rainfall for a bit too long.
Further ahead, any success in relieving the Ukrainian blockade should eventually bring some significant relief to prices.
Soya is likely to remain supported for the time being, as stocks of old crop US soya are drawn down to make up for the reduced South American harvest.
Long-term and more optimistically, current soya prices versus wheat indicate that US farmers will be keen to plant an increased soya area for the new crop.