In general, the birdfeed market has seen continued price increases across a variety of products. The larger volume commodities we trade within this sector are sunflower, peanuts and mealworms, but the main commodity used within many bird food products, is wheat.
The 2020 UK wheat crop was the worst on record for years. Final production estimates for 2020 were around 9.5m tonnes, down by nearly 500,000 tonnes from 2019. This has meant that pricing is approximately 20-25% more today than it was 12 months ago.
The sunflower market continues to be difficult with price increases seemingly on a weekly basis. The main reason for this was the poor crop in Eastern Europe, with some experts reporting a 5 million tonne reduction in the 2020 crop compared to 2019. Container availability is also a major problem from Eastern Europe and has been for some time, with many sellers reporting that shipping lines cannot offer their usual service. Demand has remained strong which has meant that raw material pricing today is upwards of 60% more compared to 12 months ago. New crop is expected in August or September, so we see no downside until then. As with some other bird food products, sunflower could get to a price point whereby manufacturers look to substitute for cheaper alternatives.
The peanut market has seen some recent price increases due to shortages in the supply chain. Argentina has all but sold out for their 2020 crop, and there is little EU/UK product available from India, meaning the US are the only real option for EU/UK importers. The US and UK domestic market for birdfood has been very strong due to Covid with more people at home feeding the birds in their gardens. We are seeing some positive news coming from South America regards their expectations for new crops, which are due to be completed over the coming months, which could bring some balance to the supply chain through Autumn and Winter.
Mealworms have been in short supply as many exporters and importers decided not to ship goods because of the huge increases in ocean freight prices. With only 10 tonnes on a 40ft container, some buyers have had to pay upwards of $5,000 extra per shipment to ensure they get their goods in transit. Raw material prices have been relatively stable, but the market remains volatile.
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