Solae increasing soy ingredient prices
December 02, 2008
by FoodBusinessNews.net Staff
ST. LOUIS — Citing record-high increases on inputs, including raw material, energy, transportation, packaging and labor, The Solae Co. has announced a global price increase effective immediately.
"Solae is not immune to these pressures and this new pricing is critical to our business and our ability to serve our customers," said Michele Fite, vice-president of global strategy and marketing.
Specific difficult market conditions include the increased global demand for protein placing pressure on agricultural and food markets; higher commodity prices increasing feed costs for livestock and dairy industries, which also impacts meat and dairy protein; this year’s soybean crop prices are still double what there were in 2005; and protein levels from this year’s North American soybean crop are significantly lower than in previous years, and this affects input costs and reduces factory capacity.
Nearby soybean futures prices closed at $8.46 a bu in Chicago on Dec. 1, down 49% from their record high of $16.58 set July 3. Prices dipped below year-ago levels, which were $10.78¾ a bu on Dec. 3, 2007, but still were above the five-year average of $7.21 for the date.
Soybean meal futures prices closed Dec. 1 at $252.30 a ton, down 44% from a July 11 high of $453.90 and below the year-ago value of $290.10. But the price was above the five-year average of $206.50 a ton.
Soybean oil prices closed Dec. 1 at 31.11c a lb, down 54% from their July 2 high of 67.77c. The price was 32% below the year-ago value of 45.42c a lb, but 8% above the five-year average of 28.84c for the date.
Forward soybean futures prices are moderately higher than nearby levels, but trade sources do not expect any runaway prices in 2009, although the overall supply/demand scenario is seen as bullish for soybeans. Cash basis levels have been relatively strong because farmers have been reluctant to sell soybeans at current levels and do not want the income counted against 2008 taxes. Trade sources also have noted that protein levels in the 2008 crop are the lowest since 1986.