European compound feed production slumps 4%

08-06-2010 | Feed processing | News

The total production estimate for compound feed production in the European Union is now set at 147.6 million tonnes, which is 3.8% below the figure for 2008 (153.4 mio. t).

The significant downturn has affected all animal species, in particular cattle feed (around -6%), pig feed (-5%) and, to a lesser extent, poultry feed (-1%).

Four key factors have weighed on the EU feed demand in 2009:

1) The dramatic crisis affecting the dairy sector, which triggered a severe contraction of the demand for efficient cattle feed, i.e. compound feed; mainly in the 3^rd and 4^th quarter;
2) The continuation of the downward slope of the pig production cycle, amplified by the financial difficulties of pig farmers;
3) The low market quotations for cereals, with the consequence that farmers had few incentives to put their cereals on the market rather than using them on the farm; and
4) The financial crisis, which led to lower consumer demand for products of animal origin, i.e. to a switch to less expensive animal proteins sources.

As far as countries are concerned, Spain and France are now shoulder to shoulder for the position of EU leading country in terms of total compound feed production, preceding Germany.

Spain indeed registered a lower decrease, i.e. -2.6% whereas Germany, France, Italy and The Netherlands experienced a downturn within a range of -3.6/-6.1%.

Cattle and pig feed production went down in almost all countries, whereas poultry feed production increased in Italy, Belgium, Hungary, Poland and Portugal but dropped in France, Germany, The Netherlands and Spain.

	Cattle	Pigs	Poultry	Others	Total
							+/-
Country	2009	2009	2009	2009	2008	2009	%
Spain	6,740	9,500	4,400	909	22,117	21,549	-2.6
France	5,003	5,894	8,472	1,539	22,679	21,292	-6.1
Germany	5,876	8,923	5,169	716	21,825	20,829	-4.6
Netherlands	3,330	5,920	3,600	450	14,577	14,040	-3.7
UK	4,799	1,494	6,239	1,303	14,001	13,836	-1.2
Italy	3,480	3,180	5,445	1,570	14,349	13,830	-3.6
Poland	670	1,370	4,340	370	7,129	6,750	-5.3
Belgium	1,097	3,580	1,326	138	6,288	6,185	-1.6
Denmark	997	2,867	550	174	4,960	4,588	-7.5
Hungary	530	1,580	1,755	205	4,125	4,070	-1.3
Ireland	2,131	633	486	400	3,693	3,656	-1.0
Portugal	805	955	1,380	270	3,510	3,410	-2.8
Romania	130	1,400	1,530	12	3,044	3,072	0.9
Czech Rep.	502	929	1,039	367	2,979	2,841	-4.6
Sweden	930	385	525	150	2,127	1,991	-6.4
Finland	600	345	305	65	1,385	1,315	-5.1
Austria	393	232	446	235	1,305	1,306	0.1
Bulgaria	35	205	410	18	710	668	-5.9
Slovakia	206	214	223	12	834	655	-21.5
Slovenia	95	110	260	12	495	477	-3.6
Lituania	32	71	245	13	401	364	-9.2
Latvia	38	111	159	17	329	325	-1.2
Cyprus	111	13	62	109	292	295	1.0
Estonia	40	140	48	2	236	230	-2.5

EUR 27 *	38,570	50,051	48,414	9,056	153,390	147,574	-3.8

*Malta, Greece and Luxembourg excluded. Milkreplacers are included in total figure.

Outlook for 2010

FEFAC experts identified as key drivers for the compound feed market in 2010

A continuation of difficulties in the dairy sector despite a modest increase in milk prices;
The end of the downward trend in the pig production cycle; and
A continued recovery in consumer demand for poultry products.

The current forecasts for the EU cereals harvest 2010 indicate relatively low quotations for new crop grains in 2010, while soybean meal prices are expected to remain stable.

The announced decrease in global quotations due to record harvests in South America is likely to be offset by a less advantageous dollar/euro exchange rate.

As a consequence, FEFAC experts foresee a further reduction in cattle feed production (-2%) and pig feed (-1%) and a stabilisation in poultry feed production. Overall, compound feed production may decrease by 1% compared to 2009.