EU compound feed output flat in 2015

Initial estimates of EU compound feed production for 2015 show a slight 0.2% increase to 156.1 million tonnes over the previous year, states EU feed trade body FEFAC, based on data provided by its member associations.

By species, poultry feed production rose by almost 2% to 51.8m tonnes, lifted by a 2.5% increase in poultry meat consumption.  Pig feed was unchanged at 49.2m tonnes – an increase in pigmeat production was offset by more home-mixing.

However, cattle feed volumes declined by 1%. The end of EU milk quotas in 2015 has increased milk production by 1%, but poorer prices, combined with good forage availability in many countries, saw compound demand soften.


EU-27 compound feed production

Output (million tonnes)         2014    2015    % change
            
Cattle feed                     42.5    42.1    -1%
Pig feed                        49.2    49.2    0
Poultry feed                    51.8    52.7    2
            
Total                           155.8   156.1   0.2

Source: Fefac           

During 2015, feed material costs remained relatively low and down on those for 2014 following the good 2015 EU cereals harvest in both yield and quality terms. There were also sufficient global supplies of oilseed meals, especially soybean meal. Lower finished feed values prices helped to counteract the effect of falling ex-farm pigmeat prices, with pigmeat output rising by 1% in 2015. Overall manufactured pig feed volumes remained stable, despite the attractiveness of home-mixed rations based on home grown cereals.

By member state, Poland saw the most growth, as in 2014, with a 4% increase in feed output during 2015, largely due to rising demand for poultry feed - it is now the EU’s largest poultry producer.  Germany strengthened its EU-leading position in compound feed production after Spain and France, while these three countries, together with Italy, the UK and the Netherlands saw their total output change between -0.5 and + 1% over the year.

Looking ahead to the 2016 feed year, FEFAC expects overall compound feed volumes to contract.  Poultry demand is expected to continue to rise, albeit at a slower rate of perhaps 1% over the year. However, pig feed volumes will fall significantly by as much as 2-3%, as oversupplied pigmeat markets se further farmgate price pressure. Cattle volumes will decrease too, by about 1%, as the mild winter weather and plentiful conserved forages in Northern Europe conspire to reduce demand for finished feeds.

Overall, FEFAC predicts a further 0.5% fall in feed production for 2016 in view of continued weak milk and pigmeat prices.

Factors that could alter this outlook are the weather – for instance the impact of the El Niño event in the Southern hemisphere on the global dairy market or the risk of drought southern Europe; disease outbreaks such as bluetongue disease of ruminants, avian influenza in poultry or African swine fever which is prevent on the EU’s eastern border. Also political disruptions such as Russia’s ongoing EU foodstuffs import ban following its Ukraine invasion – if negotiations with are concluded positively, the resumption of certain pig and dairy product exports to this large market would help farmgate prices to recover.

Weather factors could also influence EU harvest prospects. Currently the 2016 crop prospects are for a large crop based on plantings and mild winter weather. EU feed prices have been declining since 2013. The good global grain and oilseed harvest in 2015 is maintaining this trend in early 2016, and another large harvest could build stocks still further. However, weather can always disrupt forecasts, and the drought in north-eastern Brazil could yet affect the 2016 soya harvest, concludes FEFAC. 

The final 2015 estimates, with a more detailed breakdown of the national figures will be issued at the FEFAC Congress in June 2016.

Posted on February 29, 2016 and filed under EU Policy & Regulation.