Process Management

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Australian feed sector sees light at end of 5 yr tunnel

After five difficult years, Australia’s animal feed industry is expected to take a turn for the better over the next few years, according to a report by IBISWorld research.

Australian animal feed production dropped by 5.8% over the last five years, according to Feed Machinery. An overstock of grains in 2008-2010 pushed down animal feed prices on the world market. Plus, Australia experienced an increase in rainfall and overall better weather conditions creating pasture growth, allowing more livestock farmers to expand their herds. With the increased grass availability farmers purchase less feed, which led to a decrease in industry sales.

However, conditions turned in 2010-2011, when acclimate weather resulted in poor grain harvest and animal feed producers were able to raise prices. Sector profits are estimated to reach $4.41 billion (€3.42 billion) this year and animal feed production is forecasted to grow by 18.8%t due to positive price movements.

As countries like China become increasingly more industrialised and expand their livestock production, global demand for animal feed is expected to grow and other nations are expected to import more fodder supplies from Australia. In addition, the possibility of another drought means the demand for animal feed may expand even more locally over the next few years. According to IBISWorld, wheat and grain prices are expected to increase, which will also boost the feed industry's profits.

Australia's animal feed industry is currently valued at $4 billion (€3.1 billion) and supplies over 5,000 of the country's workers with employment.

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