September 3, 2010

China feed output may double by 2020

China may double its industrial animal feed output in about 10 years to supply its fast expanding livestock production, according to Cofco Ltd.

Output will be more than 250 million tonnes by 2020, growing from 148 million tonnes last year, on "inelastic demand growth" for meat, dairy and poultry, said Liu Xiaoyu, general manager of Cofco's feed division. Feed is made mainly from corn, soy and other oilseeds.

The rapid growth in feed output has been helped by reform in China's livestock sector, with more advanced large-scale livestock operations replacing the traditional family-based raising, which often used food waste as feed. The government also provided assistance to spur the sector's growth.

China's industrial feed production grew from two million tonnes in 1980 to 148 million tonnes in 2009, an annualised rate of 16%,. The growth rate was 7.98% in 2000-2009.

In the first six months of 2010, commercial livestock feed gained 4.6% to 66.3 million tonnes even as the sector faced a "complex operating environment," including surging corn prices.

Last year, Sichuan-based New Hope Group Co. produced 13 million tonnes of animal feed, replaced the China division of Thailand's Charoen Pokphand Group Co. as China's biggest. New Hope is now ranked as the world's third biggest feed maker after Charoen Pokphand and Cargill/Agribrands, he said.

China's feed output growth is pressuring domestic corn supply. By 2020, more of the country's grain will be used to feed animals than for human consumption.