The New Year has come in with an unpleasant bang for the poultry sector, with feed costs rising to record levels.
Although feed wheat has eased back a little since December, soyameal has surged forwards to pass £450/t for only the second time since prices last reached these heights in 2012.
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In mid-December, soya had been expected to show marginal signs of weakness, but the opposite occurred.
Continuing worries about dry weather in Argentina and Brazil kept driving prices higher.
With feed wheat already at historically high levels, the rise in costs of soyameal has taken our benchmark Basic Layers’ Ration past the unwelcome milestone of reaching an all-time high.
The figure for this January is £308 /t, up £6/t on the previous high a year ago.
Even so, the market fundamentals have stayed the same, and the outlook for both wheat and soya is seen as generally flat, with a marginal tendency to weaken.
UK feed wheat lost around £10/t moving into the New Year to £216 ex-farm, but this was from a record price in December, and is still just above November’s level.
In fact, the last three months witnessed the three highest wheat prices for nearly 10 years.
Probably the best that can be hoped for by the poultry industry in the nearer term is that wheat costs do not climb any higher, and the global market is still viewed as tight.
With soya, forecasters are already reducing South American crop estimates despite the absence of any firm data so far. At the same time, global demand has remained strong.