The head of agri-procurement at a UK-based farmers co-operative has advised farmers that now is the time to secure their winter feed, minerals and fertiliser as further price increases are expected.
Speaking on a recent market updates webinar organised by Mole Valley Farmers, Daniel McCreadie, head of agri-procurement at Mole Valley Farmers said farmers “could lose more than they would gain” by holding off their purchases.
“Farmers should secure their winter feed and minerals now and assess their rations to ensure they are not overfeeding amid fears that prices could hit highs later in the year as supply dwindles,” he said.
“It may be a bit earlier than usual, but you could wait and gain £5/t or lose £15/t.
“The market for grain and protein has bottomed out and is now a rising market rather than a falling one.”
The head of agri-procurement described the grain market as ‘bullish’, with July prices hitting a high of £360/t before falling back to £260/t.
He added: “Markets are volatile and moving aggressively. From a risk management perspective, it makes sense to secure your needs for winter.
“Grain prices will rear their head as we head into September and October when there are less. We may see prices rise dramatically due to supply and demand,” he said.
Neil Berryman, site and procurement manager at Mole Valley Farmers feed supplement, also suggested that farmers look at their winter requirements for minerals, as the market is also volatile.
He advised for farms to look at their mineral requirements first by assessing the rations to ensure they are not overfeeding them.
“Phosphates historically have tended to be overfed, which will come at a significant expense,” he said.
Price hikes in products like dry cow minerals as magnesium can be expected due to the volume of gas used in its production.
“Vitamins, on the other hand, are relatively stable. As a result, Mole Valley Farmers has covered material to take advantage of the pricing.”
Craig Paterson, head of fertiliser at Mole Valley Farmers added his two cents: “Urea for September delivery would see some increases.”
“Still, there could be an opportunity for farmers to buy on discounted spot value in August,” he noted.
“The availability of the product from normal origins is significantly reduced, so we will see further issues with curtailing production. My advice is to get some product on-farm sooner rather than later.
“If you are producing muck (dung/slurry), get it analysed and utilised into a plan with bagged product.”
Paterson said the weak pound to the dollar is adding up to £50/t to granular urea alone.
“Prices are being issued and pulled in the hour. A £30 increase is the new £2 increase,” he said.