The Agriculture Horticulture Development Board (AHDB) has said that the demand for compound feed in Great Britain is expected to rise in the 2024/2025 season, driven primarily by cattle and sheep feed production.
The overall feed grain market faces a global grain deficit for 2024/25, driven by reduced maize production and slower Black Sea exports.
As a result, feed grain prices are expected to rise in the medium-term.
Oilseed prices, particularly for rapeseed, remain high due to tight supply, but long-term outlooks are less optimistic with abundant soybean supplies from Brazil and potential US tariff impacts.
AHDB senior economist, Jess Corsair, said: “While cereal inclusion in feed rations will likely remain steady, the global grain market’s bullish trends could increase feed prices.
“However, the bearish outlook for oilseeds and the potential for higher soybean supplies may limit price increases in the longer term.”
The outlook for nitrogen fertiliser prices indicates a stabilisation in input markets, expected to continue over the next year.
Fertiliser prices, which saw significant hikes due to the energy crisis in Europe and changes in domestic supply, have settled down in 2024 compared to the highs of the previous two years.
In Great Britain, the demand for nitrogen fertilisers increased by 4% year-on-year in 2023, driven by reduced prices. Field-level nitrogen usage per hectare rose slightly, mainly due to increased straight nitrogen applications, while compound nitrogen application rates remained stable.
The use of urea and urea ammonium nitrate (UAN) increased, whereas ammonium nitrate (AN) and calcium ammonium nitrate (CAN) usage declined.
GB fertiliser prices remained stable throughout 2024, with AN fertiliser averaging around £336/t.
The AHDB said the UK government is consulting on a Carbon Border Adjustment Mechanism (CBAM) to be implemented in 2027, which could increase fertiliser costs.
The straw market faces continued challenges with tight supply, price volatility, and uncertain conditions for 2025. Reduced cropping areas and weather variability have strained the market, leading to higher straw prices.
Wheat and barley straw prices, saw fluctuations in 2024, with barley straw commanding a premium due to its limited supply and higher quality.
Winter cropping is set to decline in 2025, while spring-sown crops are vulnerable to weather, particularly dry conditions, which may cause variable straw yields.
While some relief may come from the 2024 forage harvest, the ongoing tight supply and higher contracting costs, such as for baling and wrapping, contribute to rising prices.
Despite some stabilisation in input costs, like fuel and fertiliser, contractor pricing has continued to rise, which supports the current price levels.
The market remains uncertain, and unless an exceptional baling season occurs, straw prices are unlikely to return to previous lower levels.
Corsair added: “Farmers will need to carefully manage their production and costs as they adapt to these conditions, with a new price level and supply constraints expected in the coming years. Weather will remain a critical factor influencing market trends.”
