Compound feed production in the European Union in 2011 was down by 0.3 percent, in final estimates as reported by the European Feed Manufacturers' Federation (FEFAC). There are expected to be no substantial trends to these figures in 2012, in spite of most major feed ingredients rising in price.
Total compound feed production for 2011 was estimated at 151 milion tons, 0.3 percent lower than the amount produced in 2010. Pig and cattle feed saw their output decrease, by -0.6 and -2.1 percent respectively, while poultry feeds saw an increase of 1.1 percent, in turn positioning it as the top produced compound feed, a little higher than pig feed. The most crucial factors to affect EU feed demand in 2011 was the still fragile economic situation of the pig industry along with the high cost of feed ingredients. Regarding ruminant feed, the severe drought of the first months of the year led to a much lower forage crop during the spring harvest, but this was countered by the good autumn weather that promoted faster grass growth.
Performances of different countries inside the EU varied greatly, with some seeing very large drops in the level of their compound feed production. Some examples of these are the Czech Republic which saw a 14 percent fall in production, and Denmark where production dropped by 6.6%. Several countries such as Germany, Poland and, to a smaller amount, Italy, managed to go against the trend and record positive growth of nearly 3%, this was help by a unexpectantly fast recovery of pig farming activities.
The high price of cereals across the previous 2 years brought to improve the competitiveness of compound feed production from feed mills versus home mixed feeds. This increase was partly offset by the developing of alternative pig feeding strategies based on roughly ground feed and liquid feeding.
The report showed that Germany’s furthered its position as lead producers of compound feed in the EU, followed by France, and then Spain.
Experts from FEFAC keyed out the a number of crucial drivers for the compound feed market in 2012:
For the livestock sector these include; the implementation of new cages as standard for laying hens from 1 January 2012; the new group-housing regulations for sows which could lead to a substantial decrease in young sow replacement in some producer areas; and finally the presence of the Schmallenberg virus in ruminants may havea negative affect on demand.
For compound feed demand these include; the high quotes for all feed ingredients. Whether energy sources like cereals or protein sources like soybean meal, as a result of large Chinese demand and S.Americas seasonal drought, will continue to impact on the profitableness of the livestock sector, particularly pig farmers;
On the supply side these include; the continuing troubles with the trade of maize co-products (DDGs, Corn gluten feed) associated to asynchronous approval of yet to be authorised GM events, in spite of the technical solution being implemented and put into operation last year.
In summary to all this, the FEFAC are anticipating a stabilisation in the production of cattle compound feeds, a small growth in poultry feed demand (of around 1 percent) offset by a reducing of demand for layer feeds (of around 5 percent) and a continued slowdown in pig feed production (of around 0.5 percent). In conclusion, FEFAC is forecasting that compound feed production in 2012 will remain stable compared to last year.
