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The raw materials market

Advice from our specialist Advice from our specialist17-4-2020

The wheat market chart below says it all. The bull has been on the run; pushing raw material prices upwards.

Almost all commodities have increased. There are many reasons for this and for those of you who have tried to get winter and spring wheats' in the ground you will be all too aware of one of the main reasons. We have also had a strong export market into the EU putting pressure on supplies at home. 

Afbeelding: Raw materails graph

Although dropping slightly off the recent high, as I'm writing this article, the price of soya is up 20% on the start of the year putting a high floor in the proteins market. 

The exchange rate hasn’t helped matters with the pound weakening against the dollar to hit a ten year low. Meanwhile back at home the export market for UK wheat has been buoyed by big exports to the EU and the fear of a shortage as the wet winter has led to significantly reduced plantings, especially here in the UK. 

The end result of this is that purchased feed prices will rise. Feed will need to work harder to deliver you the same margins, so balancing the diet is more important than ever. Forage quality and quantity is going to be key this year.

Creating stability in uncertain times

With the raw materials market still looking bullish it is worth reviewing margins for the year ahead. How much stability can we lock into the business? 

As the total feed business we have the ability to help you achieve your goals whatever they may be.

In the example farm below, improving forage quality and adjusting the ration has led to a reduction in purchased feed use whilst slightly improving milk yield. Overall, a lift in milk from forage of around 800 litres per cow. Whilst compound feed use has stayed the same, this farm has become less reliant on bought in feeds to fill a feed gap and this has improved margins by ~£30,000. 

Every farm is different and the direction of travel on the Milk Map depends on what is best for your farm. By working with our team they can use your data to plot your on the map and look at new opportunities to improve your margins, even in the light of a strong raw materials market. 

Get in touch

For more information on how we can help you or to plot your farm on the milk map please contact your local Account Manager or send us an online enquiry here.