ABARE - Biofuel Demand Ensures That Coarse Feed Prices Will Remain High In 2008

[hatrack]

The US demand for feedstock for ethanol will ensure that worldwide demand for coarse grains remains at record levels, according to ABARE. The forecaster has predicted last year’s production and consumption records will again be smashed as farmers clamour to get a piece of the high prices, all driven by the US hunger for corn.

The ethanol mandate in the US is expected to counter-balance the downturn in the demand for animal feedstock, as the profitability of intensive livestock industries is hit by high grain prices.

And although prices for Australian winter coarse grains, primarily barley and oats, are expected to drop from last year’s white-hot levels, ABARE expects the fundamental market drivers to mean Australian farmers will still be left with an attractive proposition price-wise.

Feed barley prices are forecast to fall by 13pc from last season to average $276/tonne port, which is still in the top 10pc of historical prices. The Australian market is set, this year, to follow international trends more closely.

EDIT

http://nqr.farmonline.com.au/news/nationalrural/grains-and-cropping/barley/outlook-08-biofuel-to-drive-record-coarse-grain-demand/81723.aspx