In reply to your question,WS, my view on feed prices is if one looks at the futures the farmer is under pressure for the next year , therefore the lower feed prices will benefit the users of feed be it beef, pork or poultry. As far as AFR( afgri) they are different in make up to RBW & ARL, as they are far more exposed to the farmer, who at present are under the whip.Their exposure to the poultry industry, which is nice and profitable at the moment(for reasons I have given in my previous posts, and also confirmed by this weeks ARL results), is nowhere near the 2 big players. AFR are closing or have closed a large number of their smaller trading outlets inherited from OTK & NLK (Natal landbou Koop).Their performance this past year has been bouyed to a certain extent by the record crops, where they have a monopoly in storage capacity in certain provinces, eg Ithink they own all the maize storage silos in KZN. They closed their only feed mill in KZN hopng to increase through put in their mill in Bethlehem(prev Nolko Feeds), but cost of delivery to KZN put paid to that.I see further competition in Eastern OFS, coming from OVK( one of SA's best run Coops), with their recent purchase into Nupro Commodities in Bethlehem. AFR were planning a mill in PMBurg should have been operational by end of 2009, but as there is over capacity here at present it appears this is on hold.I do hold shares in AFR, which have been disappointing. I would not be a buyer at these levels but at 550 and below mayb e worth a punt.Trust the above will help in making up your mind.
