Market Intel: How Ingredient Trends Early in 2024 Could Impact Feed Prices

Midwest producers, we’ve got a quick dive into dairy feed ingredient intel just for you:

 Soybean meal: Market Intel sources point to Argentina's 2024 soy crop possibly twice as big as 2023, thanks to timely rains. However, the same sources urge caution on those expectations -- it’s still too early for accurate estimates. The same is true for the biggest Mercosur (or Mercosul) soybean supplier, Brazil, where growing conditions continue to be more variable.

Therefore, SBM basis and board prices are trending lower.

However, there's also a tempering effect given lower-than-normal soil moisture in Ohio and other eastern soy belt states due to sporadic autumn rains and lack of early winter snow cover. Current water levels in the Ohio River offer a quick gauge and add to uncertainty about planting to come.

Canola basis remains steady along with soy protein products.

Distillers: Exports are up and prices are up slightly overall, with strong uptake in areas not affected by VOM (vomitoxin aka deoxynivalenol or DON mycotoxin). Corn ethanol processors continue to have challenges sourcing low-VOM raw material, which has generated a $20-40/ton premium.

Meanwhile, DDGS is coming into the Tri-State, particularly Ohio, transloaded by rail from sources as far west as Nebraska. 

Soy hulls: Supply and prices are steady going into Q1 with hulls "baked into" many dairy rations at this time of year. Pellets typically get a premium over loose product, although one source notes price variability, depending on the processing plant.

Urea: Recovering from the November slump, urea prices -- along with potassium chloride and some other macros -- are steady to higher thanks to low water in the Panama Canal and lower Mississippi River. A Market Intel source reports big premiums paid by shippers in order to "jump the queue" of vessels lined up to enter the Canal.

Blood meal: Prices may have reached their peak following the run-up in December. Market Intel expects lower prices in Q1, possibly running into April.

Amino acids, vitamins, minerals: How big of a Chinese New Year (Feb. 10-17) will we have to start off this Year of the Dragon? How much will relatively low consumer spending and a weaker economy affect micro ingredients coming from the world's leading exporter?

So far, the market is well-supplied, such that overall AA pricing remains steady but with some price relief ahead for tryptophan. Pricing on most vitamins and trace minerals, including copper, is likewise steady.

Palm products: An unusually dry inter-monsoon season has reversed with recent torrential rains further lowering palm oil production in Indonesia and Malaysia. Palm product and calcium salt prices have continued to rise.

Just over the horizon… Ingredient shipments east from West Coast ports are becoming problematic again, mainly due to labor and trucking shortages. A very big Chinese New Year may exacerbate delays.

Navigating the intricate landscape of feed ingredient trends has become increasingly important for dairy producers across the midwest. Commodity Blenders prioritizes keeping a watchful eye on markets so that farmers and their nutritionists in Indiana, Ohio, and Michigan have the best information on feed pricing and availability.

Stay tuned for the January WASDE Report and connect with FeedInsight 4U if you have any questions about this analysis. If you aren’t already a subscriber, sign up to get access to our exclusive dairy industry newsletter.