Strong yields in the United States soya bean crop could translate into a further drop in compound feed prices in Ireland over the coming weeks.
Compound feed prices to Irish livestock farmers have fallen around €5/t since their peak in early 2013 but further reductions are expected if the US and South American soya bean harvest can ease supply pressures on the international trade.
Tight supplies of soya bean have kept the price of this feed ingredient fairly steady at around €470/t to the farmer, but substitute protein sources such as distillers grains, gluten and rapemeal have fallen by about €50/t in the last 12 months.
Movement of soya bean from South America, one of the world's main sources of the feed ingredient, has been limited by logistical problems with boats and the cost of freight from Argentina. This has been another factor keeping a floor in the market for soya bean and keeping prices up.
The supply of lower protein ingredients such as distillers and maize gluten to Europe have been limited in recent months. The Chinese have been buying up distiller's grains "like it's going out of fashion", according to one industry source.
The US Department of Agriculture has forecast China's soybean imports will hit 69m tonnes in the 2013-14 market year, a 16pc increase over the previous year.
The high soya bean price has prompted cattle feeders in the US to switch to feeding maize gluten that would normally be exported to Europe. The Chinese have also been soaking up large quantities of rapemeal (canola), resulting in lower supplies to Europe.
However, harvest 2013 for soya bean in both north and south America should ease the pressure on soya bean prices and result in lower priced protein feed ingredients too.
The coming six weeks should see cheaper feed ingredients come on stream and help to reduce compound feeds in Ireland, although industry experts refuse to predict by how much.
On the energy side, wheat is trading at around €210/t, while barley is at €185/t and spot prices for maize are around €202/t.
Meanwhile, figures from Teagasc's E Profit monitor show that feed costs on cattle farms rose by a massive 31pc between 2011 and 2012 as a result of the appalling weather conditions.
Concentrate feed costs rose from €215/ha to €282/ha according to the E Profit Monitor figures.