July 2, 2008

EU feed producers reducing soymeal use due to high prices

Animal feed makers in Europe are turning away from expensive soymeal even as production is increasing, Hamburg-based oilseeds analysts Oil World said on Tuesday (July 1, 2008).

Soymeal prices have been weaker in recent weeks due to signs of progress in the Argentine farmers dispute, but still remain at overall high levels.

Demand for soymeal has suffered due to recent high prices, causing European feed producers to reduce soymeal content in their feed, Oil World said.

However, European and other soymeal production are still running at a high level, partly because of high profit margins, it said.

Oil World estimated European mills were achieving profit margins of over US$70 a tonne crushing soy in June, up from only US$40 a tonne in January.

Farm strikes in Argentina, the world's largest soymeal exporter, meant disrupted supplies from the country. This meant soy crushers worldwide are increasing capacity to fill the void.