Price of feed

Feed crops include mostly coarse grains like barley, corn and oats, and products derived from oilseeds, particularly canola and soybeans. In the past five years, prices for these crops have decreased as the level of production of these major grains has increased, resulting in higher stocks. This increase in supply over the past five years, has placed downward pressure on the price of feed. As a result, the price of feed has been falling from 2014 but rebounded in 2018 and is expected to continue to grow.

While the price of feed has been declining during most of the period, it has benefited from various other factors. For instance, the price of feed has been bolstered by the fact that these grains are also in demand as biofuel inputs. Furthermore, the effect of oil prices on feed prices has increased significantly in the last decade due to the increased use of corn-based ethanol as a gasoline substitute and soybean-based biodiesel as a diesel fuel substitute, which volatile crude oil prices have exacerbated. However, distillate grains, a by-product of biofuel production, are also used as livestock feed, which partially mitigates the price spike in grain crops used for biofuel production. Oil volatility persisted in 2021 as the global economy began recovering from the COVID-19 (coronavirus) pandemic. Additionally, a sharp increase in feed demand due to feed grain shortage in Western Canada caused prices to surge in 2021. Concurrent supply chain issues which spilled into 2022 led to prices for feed hiking up in the period as a reopening of the economy in the time pressured farmers to produce at a higher rate. Inflationary trends stemming from this period resulted in the prices of many essential input items from fertilizer and gas (which are often used to power machines to produce more items) to scale up in the period, which also put pressure on producers at the time having to face higher operating costs in the year. With inflationary pressures continuing in 2023, prices are set to remain more elevated compared with pre-pandemic years, however prices dropped 5.4% and 0.3% in 2023 and 2024, respectfully. In 2025, prices are set to return to growth, rising 1.7% during the year.