Market Intel

The Fog of More (Tariff Effects)?

• Added import tariffs to increase the cost of China-sourced micro ingredients — amino acids, vitamins, trace minerals — but many vendors in pass-along-delay mode
• Double whammy — tariffs & supply — coming for copper sulfate
• South American soybeans — harvest looking strong

Soybean meal: Good soybean harvests underway in Brazil and projected Argentina output are helping to keep basis steady while board prices swing up-and-down, in effect sideways. Soy products basis remains in lock-step.

Canola meal: Tariffs tit-for-tat is now underway and likely to reduce Canadian trucks hauling south. Market Intel sources see lower board prices and project lower basis into July.

Amino acids: Tariffs on China-sourced product — now increased to 20% total — are having variable U.S. price effects depending on vendor. Some vendors are holding prices steady given somewhat softer demand due to H5N1. Others try pricing up, only to retreat. Lysine, DL methionine, tryptophan — supplies remain good.

Vitamins: Vitamin availability is improving thanks to reduced supply hold-ups. Prices for vitamins E, A, and D₃ are steady, but the “China tariff effect” is likely to push prices up as current inventories decline.

Trace minerals: Likewise, additional tariffs can impact prices ahead, but overall it’s still a quiet, steady market, except for copper sulfate. The recent closure of a major mine in Chile is causing prices to ripple-up worldwide.  

P & K: Phosphate prices are up again thanks in part to seasonal demand, even as some suppliers delayed adding a tariff surcharge. Sources say a few tried, then backed off. Potassium chloride (KCl) prices are steady, while magnesium oxide (MgO) prices are up with a premium for quality domestic product.

Wheat midds: Prices are retreating with adequate supplies, becoming more attractive for rations on into spring.

Blood meal: Prices are steady now. But, Market Intel sources suggest, they’re likely to push up again with no let up until the end of April.

Distillers: DDGS prices are moving down based on current and expected corn supply and softening export demand. Counter tariffs may further weaken exports and prices. The usual unknowns — spring ethanol producer downtime, summer fuel demand, competing proteins — may make prices even more variable this year.

Soy hulls: Now past the “tipping point,” lower prices are stabilizing near term. Ahead, the processors’ summer shutdowns can move the market. 

Over the horizon… The “paradigm shift” of the new administration is well underway, especially affecting international trade. Can foreign micro ingredient suppliers “reshore” in order to export from countries not directly impacted by new U.S. import tariffs? 

Available now: March WASDE Report.

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