Back in February we told you about the historic price increases in the commodities market (you’ll remember this is how feed manufacturers buy ingredients) and here we are in May still seeing increases. Just this week Soybean futures topped $16 per bushel for the first time since 2012, due to the forecasts of tight supplies through most of 2022 and corn hit an 8-year peak last week. As we enter the growing season for most of the heavy-hitter crops (corn, soybeans, etc) analysts are anxiously waiting for USDA to release their crop reports. Currently they anticipate lower numbers of acres of corn and soybeans being planted as many areas of the Midwest are currently facing drought conditions. When you add this to already low inventory levels, and higher export pressures the laws of supply and demand come into play and prices go up. China continues to buy A LOT, and there’s a major drought in Brazil, which typically exports a significant amount of corn. Prices in the coming months will depend, a lot, on the planting and growing reports and growing conditions in the Midwest.
Corn Prices – 1 Year History from macrotrends.net
Soybean Prices – 1 Year History from macrotrends.net
It is important to remember that feed companies typically have a team of buyers working hard to secure contracts to minimize increases, and keep prices as stable as possible. We, too, try to minimize volatility, contract when we are able, and buy in quantities that get us the best price while keeping feed as fresh as possible. We do our best to stay up-to-date with what’s going on in the market so we can have conversations with you. If you have any questions, or would like to evaluate your current feeding program, please don’t hesitate to reach out.