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With the price of commodities crashing.
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BS Hauler
Reg. Jan 2012
Posted 2018-07-11 11:11 AM (#7402057)
Subject: With the price of commodities crashing.



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 I wonder if we will see the price of horse feeds dropping. They should atleast some. But I doubt it. It looks like most of it should be able to go down atleast 15 to 20 % from the cost of ingredients
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cowgalsissy
Reg. Dec 2008
Posted 2018-07-11 11:36 AM (#7402060 - in reply to #7402057)
Subject: RE: With the price of commodities crashing.



Too Skinny


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BS Hauler - 2018-07-11 11:11 AM

 I wonder if we will see the price of horse feeds dropping. They should atleast some. But I doubt it. It looks like most of it should be able to go down atleast 15 to 20 % from the cost of ingredients

All they see is the 15% straight profit so no they won't be going down.
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Southtxponygirl
Reg. Nov 2006
Posted 2018-07-11 11:42 AM (#7402063 - in reply to #7402057)
Subject: RE: With the price of commodities crashing.



A Somebody to Everybody


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Not going to be happening..  
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Tdove
Reg. Apr 2015
Posted 2018-07-11 11:54 AM (#7402068 - in reply to #7402057)
Subject: RE: With the price of commodities crashing.



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There are a lot of commodities which work independent of each other. So some ingredients may be going down, while others are up. For instance, alfalfa is up quite a bit. Now your feed companies that use least pricing will just lower or replace higher priced ingredients for lower priced ones. This usually lowers the quality of feed.

Another thing to consider is that feed companies don't buy commodities, they by ingredients, all of which have some sort of processing and shipping attached to them. I am not sure the feed mill will see any decrease in ingredient prices, mainly due to the recent increases in freight.



Edited by Tdove 2018-07-11 12:07 PM
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SKM
Reg. Dec 2003
Posted 2018-07-11 12:08 PM (#7402073 - in reply to #7402057)
Subject: RE: With the price of commodities crashing.



Saint Stacey


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I’m sure they can ship to Australia if they are that low. Australia is in a world of hurt with the drought. Although with the way it’s been this summer here in the USA...we might not be far behind them. I bet prices start going back up.
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OhMax
Reg. Feb 2013
Posted 2018-07-11 5:59 PM (#7402126 - in reply to #7402068)
Subject: RE: With the price of commodities crashing.


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Tdove - 2018-07-11 11:54 AM

There are a lot of commodities which work independent of each other. So some ingredients may be going down, while others are up. For instance, alfalfa is up quite a bit. Now your feed companies that use least pricing will just lower or replace higher priced ingredients for lower priced ones. This usually lowers the quality of feed.

Another thing to consider is that feed companies don't buy commodities, they by ingredients, all of which have some sort of processing and shipping attached to them. I am not sure the feed mill will see any decrease in ingredient prices, mainly due to the recent increases in freight.


Yes....
I asked my boss who use to work in animal feed. It’s all relative and some of the more specialized ingredients that don’t have quite as liquid a market may not be moving at all, or like alfalfa be increasing in price.

Plus consider the crash has happened in the last 6 weeks, corn specifically has lost 70+ cents since Memorial Day. Large feed companies likely work on replacement costs, or what that ingredient costs today, not what they bought it for (and they’re hedging risk off on the board too). But it’s entirely possible a smaller company is working on actual costs - and they are usually forward contracting commodity at least a month, some even quarterly. So the cost of the corn in their bins hasn’t caught up to the cost on CBOT.

It’s not fun to be a corn buyer right now.
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