Lower global soya crop to reduce poultry margins

Poultry producers could face further strain this year as feed prices look set to rise on the back of higher soya bean oilcake prices.

With soya bean harvests in South America poised for decline as a result of bad weather, imports from this key region would be under strain.

The International Grains Council (IGC) recently forecast a 4% decline in global soya bean production this year. This was predominantly due to smaller harvests in the three main soya-producing countries: Argentina, Brazil and the US. The IGC placed global production at 353 million tons for the year.

“With supplies expected to tighten, utilisation is predicted to contract for the first time in 10 years, including reductions in Brazil and Argentina, in contrast with prospects of a record US uptake. Combined end-season inventories are expected to decrease sharply,” the IGC report stated.

Wessel Lemmer, general manager of Agbiz Grain, said that while South Africa’s soya bean crushing ability had largely increased over the past few years, it still struggled to compete with the prices of imported soya bean oilcake that landed in the country.

This meant that while inland poultry producers relied on locally crushed soya bean oilcake, coastal producers bought imported products.

“While 4% is not a big decrease in global [soya bean] stocks, it will have an impact on prices. Since most of our oilcake is imported from South America, the fact that their stocks are greatly reduced will have a larger impact on our livestock producers who rely on soya oilcake for their feed,” Lemmer said.

Tighter stocks and high prices will result in subdued demand, as well as an expected uptick in plantings during the coming year, producing a 2% increase in supply for the following season.