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Phil Baynes

June 2014: Bountiful maize crop forecast, but still keep a watch on raw materials

PW ReportersBy PW ReportersJune 6, 20143 Mins Read
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Production and the availability of the world’s number one cereal, maize, is due to be much higher in 2014/15 than the previous year, according to the World Agricultural Supply and Demand Estimates (WASDE) published by the USDA. If this is realised, then it’s great news. But the vagaries of global weather mean that producers are still well advised to hedge their requirements for raw materials such as maize.

Record volumes of maize have been imported into the UK this season for bioethanol production and for feed – both compound and home-mix use. Maize has many attributes, including its digestible energy fraction and natural antioxidants to complement and enhance those already going into the diets. In fact, maize in pig diets has a lot going for it.

The beauty with the crop is the global spread of its production, which eases out seasonal availability. But despite the current encouraging view of the USDA, it’s still important to post a vigilant watch, particularly on developing weather patterns. Climate change is making accurate crop production forecasting far more difficult. As a result, producers are best advised to hedge their requirements for the future.

For example, the El Niño weather phenomenon is reported to be more likely this year, which will impact on Australian wheat production and potentially increase concern for the already dry US winter wheat crop.

A pattern that has been developing for soya in the past few years is a post-Christmas/early spring pinch point in global supply. This looks likely to continue as US stocks have been running lower and lower year-on-year, and are now down at 2003 levels (and 11 years ago there were 800 million fewer mouths to feed).

To counter this, the US takes shipments of soya from South America to shore up its ailing stocks, but these are not available until the harvest there is gathered and ready to ship. All this supports prices from mid-spring to early summer, when the shipments from South America start to arrive in the US and European ports.

It’s useful to keep a few key dates in mind when discussing prices and availability of raw materials with suppliers. In the November to April period, prices will reflect US harvest expectations, and in the May to October period, South American expectations are also taken into consideration.

A forward-buying policy for soya remains the most successful strategy, but this can be further enhanced if the portfolio of protein products in feed can be increased.

As a home-mixer, increasing raw materials to include rapeseed extract, beans, high-protein sunflower or DDGS will further buffer the volatility in the soya market.

> Born in Essex, schooled in Suffolk and a graduate of Reading University, Dr Phil Baynes has spent his career in pig welfare and nutrition. Now based in Cheshire, he runs Baynes Nutrition and is a consultant nutritionist to Provimi

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