Offering a glimpse as to what the future might look like in regard to the feed market, Ever.Ag brokers Bryce Windecker and Kathleen Noble-Woffley gave insight as to what we can expect this season in a Center for Dairy Excellence Protecting Your Profits webinar.
Although many farmers have been dealing with wild weather throughout the country, crop conditions continue to remain strong, and yields are expected to reach high levels. Based upon USDA’s crop condition report, the United States as a whole will see a good corn and soybean crop this year. “With the exception of the Mid-Atlantic, the average U.S. corn crop rating for ‘good’ to ‘excellent’ is near the top end of the five-year average range,” noted Noble-Woffley.
This coincides with the fact that over the years additional technologies have been added to corn to help improve the quality and yield of the crop. Even in years where weather proves to be a challenge, the U.S. farmer has seen average, if not better, yields. “The fact of the matter is we’re just pretty good at growing corn. With the varieties we have from all these different technologies and advancements over the years, we can almost put on 180-bushel corn with not a lot of rain,” said Windecker. Soybean projections are also about 10 points above the five-year average, with yields anticipated to be high.
Harvest season provides farmers the opportunity to sit down and analyze how their crops yielded and how they would like to move forward as they enter the next year in terms of contracting feed. A large emphasis is based on protein prices, with biofuels having a significant impact on the protein market. Ethanol production has topped out over the five-year average since May of this year, and distillers grains are leaving ethanol plants at more desirable prices. Noble-Woffley also noted that soybean crush capacity is expected to expand 23% over the next three years, with more crush opportunities coming down the pipeline.
The canola market has continued to face pressure over the past few weeks due to freight and labor issues. “There are some brewing issues as we think about what could impact the canola market, particularly on the basis side,” warned the brokers. Ongoing strikes at crushing plants throughout Canada and rail strikes have put a strain on the canola market. Although canola fits well into rations due to its amino acid profile, Windecker recommends looking at other alternatives that can replace canola, while still supplementing the diet in terms of amino acids.
When navigating how to begin the process of locking in feed, Windecker recommended breaking it down individually and looking at it from a standpoint of your farm’s profitability. Working alongside a well-organized management team that provides insight and advice will also help streamline the process.
