EU compound feed production has been stable in 2013 compared to 2012. The same trend is expected to continue in 2014, despite a challenging economic environment for the feed and livestock sectors.
This was said at the 57th Fefac Annual General Meeting “Greening the landscape for animal nutrition in Europe” on 5-6 June 2014 in Liège, where Fefac members provided final estimates for the compound feed production for the EU-28 in 2013.
Cool weather in spring
The total production estimate is now set at 155 million tonnes, i.e. slightly above the 2012 figure (154.7 million tonnes). Pig feed has seen its production fall by -1.4%, whereas cattle feed increased by +2.2% in 2013. Poultry feed remained stable at +0.3%, thereby confirming its position of leading segment of compound feed above pig feed. The most important factors which have weighed on the EU feed demand in 2013 were the cool weather in spring, which impacted negatively on availability of forages in Northern and Eastern Europe countries but provided a positive impulse in the Iberian peninsula and the still fragile economic situation of the pig sector, which affected the resilience of the pig production.
Demand for cattle feed
Among the largest producing countries, UK, Poland and Belgium confirmed the good results recorded in 2012, with an annual growth around +3% in 2013, boosted mainly by the demand for cattle feed. On the opposite side, The Netherlands, Portugal and Hungary saw their production continue to fall to around -2.5 / -3%. Among the top 3 producer countries, the production volume in France and Germany remained stable, whereas Spain fell back by -1.7%, thus allowing France to recover its position of second most important producing country lost in 2011, with Germany staying in the lead. Production of pig feed dropped in almost all large countries, impacted in particular by the strong decline in sow herd resulting from the implementation of the group-housing requirements for sows.
Outlook for 2014
Fefac market experts foresee a stabilisation in poultry and cattle feed production and a further reduction in pig feed production (-1%). Overall, this would lead to a slight decrease in compound feed production in 2014 vs. 2013 (between -0.2 and -0.5%).
The export-led market demand for EU livestock products, in particular dairy products, is expected to continue thus anticipating the end of the dairy quota system. This positive trend is expected to compensate for the potential reduction in feed demand induced by the good weather conditions favourable to forages yield. The generally favourable outlook on global grains and proteins production is expected to result in stable markets despite strong demand. This may lead to a slight increase in meat production in particular for pork.
The expected good EU cereals harvest might however encourage home mixing in the EU, which would directly impact on the industrial feed supply. The political uncertainties linked to the situation in Ukraine and with regard to the impact of future free trade agreements both regarding tariff concessions for livestock imports to the EU and market access to raw materials are among the factors which could affect both raw material supply and future investments in the EU livestock sector