Germany-Animal feed prices rising.

GERMANY - Experts at the DLG Winter Seminar said they expect price increases in second half of 2009 with wheat in the Paris exchange rising to €200 per tonne. Recommendations include forward selling when prices high.

The worldwide economic crisis could reduce production of grain and oilseeds and see prices pushed upwards by autumn of this year according to financial analyst, Jochen Hitzfeld from UniCredit, Munich. He was speaking at the DLG’s Wintertagung conference in Berlin in January. And his predictions were good news for the investment climate at the world’s largest farm equipment exhibition, Agritechnica, to be held in Hanover, on 10 to 14 November (with preview days on 8 and 9 November) where specialists from all over the world gather to learn about, and invest in, the latest technology solutions for efficient agriculture.

Behind the expected price boom is the difficulty, especially in emergent countries, of getting credit – a situation already stopping expansion of agricultural production in Russia and the Ukraine, at least for the moment, according to Mr Hitzfeld. On top of this, global reduction in demand for fertiliser and plant protection sprays could have a negative effect on yields this harvest. Following farm product price reductions in the last months, cropping on 30 per cent of the most expensive production areas was no longer profitable, leading to an over 10 per cent reduction in northern hemisphere growing area.

But another expert at the DLG Wintertagung, Frank Gagel of traders Schouten Ceralco in the Netherlands, warned of continued fluctuations in wheat price. Bread wheat at the Paris Exchange (MATIF) would not go lower than €130 per tonne, he felt. Mills and feed plants still needed substantial supplies for production up to the new harvest. So there was plenty of room for price rises up to €200 per tonne.