Wheat and
corn forecasts for 2013-2014 have been raised 6 and 10 percent, respectively,
compared to last year by the International Grains Council. Assuming all goes
well as predicted, these numbers will not suppress cereal prices. This is partly because China's bad
harvest season will increase their imports to absorb most of this global
increase, and the ever-present increasing demand for cereals as the world
population keeps increasing!
We should
also not forget that global, year-end stocks remain at very low levels, so don’t look for much surplus grain in the global market. Also,
biofuel production does not appear to be weakening anytime soon, at least to
any significant level!
Cereal prices might
drop a bit, but NOT as much as we would like them to. So, what does all this
imply for pig and poultry farmers?
First,
all measures to optimize feed costs due to previously high prices should not be
abandoned. All experiences gained with alternative ingredients should not be
neglected. Today, animal nutrition is following a conservative approach, and
there is no reason to go back to generous safety margins and overuse of all
kinds of supplements!
Second,
we should always be skeptical of prices that appear to be too good to be true, it
is difficult to discern which lot is cheap and which is just inexpensive.
Quality issues, such as high mycotoxin levels and high polysaccharide levels,
are frequently hidden behind an attractive price. Although there are remedies for
these problems, it is best to ensure the remedy does not cost more than the
actual savings!
