Farmers have been warned to expect increased feed price volatility to continue well into 2017, due to the effect of ‘Brexit’ on currency exchange rates.
The warning comes from ForFarmers’ Phil Watkins who also highlighted the potential volatility effect of 2017 elections in several European countries.
As for the state of the world’s 2016 production of raw materials he said that global grain stocks are currently “high”, albeit with a majority of stock being in the Americas or Russia and the Baltic region.
“Northern Europe’s more recent harvest was probably at least 10 million tonnes light with most of this being in the EU’s major exporter, France,” he said.
“The UK’s harvest was average, at best, and due to sterling’s devaluation the UK has been more competitive in the export market.
“Along with this, UK demand looks strong as bioethanol plants with potential to use two million tonnes annually are expected to continue. While this is good news for arable producers, it may lead to a shortfall that could spike the market as we move closer to the 2017 harvest.”