We been watching the commodities market [think feed ingredients] closely where the action hasn’t been quite as crazy as the GameStop drama, but still very notable. It’s important to remember that for feed manufacturers ‘the market’ isn’t just a place to invest and hopefully make money, it’s where they go to actually purchase ingredients. Included in the commodities market is everything from corn to wheat middlings to soybean meal to butter, etc… Corn and soybeans are the big hitters and watching their activity gives a good indication of the market as a whole.
Here are a few things to note:
- Corn prices have been between $3.25-$4.25/bushel for most of the last 6 years. They are currently over $5/bushel and are expected to stay there through the planting/growing season.
- The increased price is a function of smaller than expected yields last year (Derecho storm damage in Iowa and less acres planted), increased exports, and weather concerns in South America.
- Soybean meal has been between $290-$340 for the recent past but is currently over $420 and expected to stay through the planting/growing season.
- These price increases come from a very short US soybean crop and an increase in exports.
- Vitamins are currently double the price they were a year ago. There isn’t an issue with manufacturing but accessibility is limited due to a backlog at the ports.
Corn, soybeans and vitamins also happen to be some of the main ingredients in many (quality) horse & livestock feeds. Soybean meal is one of the best protein sources for horses from bio-availability standpoint and its amino acid profile. When grain prices go up feed manufacturers could look to other ingredients but risk compromising the quality of the feed they produce. At D&L we are proud of the partnerships we have built with our feed suppliers over 30 years in business and appreciate their commitment to providing consistent, quality feed for us to offer to our customers. We know market volatility, and the pricing changes that come with it, can be very challenging and we do everything we can to get the best pricing available to us. Our retail pricing structure is based off the cost of the product to us, and this means if our cost goes down, so will the retail price. We hope the current market conditions are temporary and are optimistic that things will turn around as we get into a new growing season. If you need help evaluating your feed program to make sure you’re getting the most for your money, don’t hesitate to reach out; we’re here to help. We love sharing our love and passion for the agriculture industry every day. We promise to keep learning so we can continue to provide you knowledge, service and value.