June 30, 2016

FEFAC 2016 feed outlook pessimistic

According to data provided by FEFAC (the European Compound Feed Manufacturers' Federation), compound feed production in the EU-28 in 2015 reached 157.3 million tonnes, 0.6% more than in 2014. However, FEFAC is relatively pessimistic about the forecast for 2016.

In 2015, while cattle feed production dropped by 0.7%, swine feed and poultry feed grew by respectively 0.6% and 1.2%. Poultry feed thereby further enforced its leading position in EU feed production.

Feed costs remained low and even decreased compared to 2014. This was due to a good 2015 cereals harvest in the EU, both in terms of quantity and sanitary status, and a largely sufficient supply of oilseed meals globally, especially soymeal. This compensated the still decreasing pigmeat quotations to a certain extent, while pigmeat production continued to increase by close to 4% in 2015.

For cattle feed, the production situation is as usual very contrasted across Europe, depending on weather conditions for forages production. The effect of the lifting of the quota regime, with a +2% milk delivery in 2015 vs. 2014, was hardly visible for the compound feed industry EU-wide, with the exception of Ireland and the Netherlands.

Finally, poultry feed production continued to grow, boosted by an increase per capita in meat consumption (+2.7%), which primarily benefited poultry meat (+4%). As a consequence, poultry feed consolidated its position as a leading segment of EU compound feed production, now well ahead of pig feed.

Poland and Spain have been the only well performing member states among the largest EU producing countries, with annual growth close to 4%. Germany recorded a significant decrease (-2.9%) after five consecutive years of growth, whereas the UK was set back by more than 4%, especially because of bad results in poultry feed. All other major producers — France, Italy and the Netherlands - saw limited changes in their production records.

Germany and Spain are now shoulder to shoulder in their positions as leading EU countries in terms of total compound feed production, well ahead France.

For 2016, FEFAC market experts are relatively pessimistic concerning compound feed production. They do foresee the upward trend on poultry feed demand to persist, though at a slower pace than in 2015 (+0.5%), but also a significant reduction in swine feed demand (-1.5%), in line with expert forecasts on pigmeat production in the EU. Overall, this would lead to a 0.7% decrease in compound feed production in 2016 vs. 2015.