October 21, 2015

Substituting EU's GM soy will raise feed costs, says FEFAC study

Feed costs could spike by about 10% when substituting genetically-modified (GM) soy with non-GM grains, according to an assessment on potential economic impact resulting from the EU Commission's GM "opt-out" proposal released on October 20.

The study, conducted by COCERAL, FEDIOL and FEFAC, examined relevant implications for feed and livestock sectors in France, Germany, Hungary and Poland which could choose not to abide by GM authorisation.

Not all soy feed are required to be replaced by other protein sources. Furthermore, much of today's soy feed in the region are GM types and substitution would mean a premium of between EUR44 (US$50) per tonne and EUR176 (US$200) per tonne; that is 15% to 50% of product value, and would trigger a 10% jump in feed costs for the livestock sector.

For France, Germany, Hungary and France, opting-out would amount to feed costs of about US$1.4 billion. Taking the entire EU livestock sector into context, US$3.2 billion is the figure should all EU states choose to opt out. The significant sums could pose a serious challenge against competitive positions of affected nations, both in the domestic fronts and export markets, the report stated.

In addition, the global demand for non-GM fed animal products are limited and could upset demand adaptation due to restricted supplies. Hence, livestock holdings in opt-out countries face the threat of closure which would lead to loss of competitiveness and severe consequences for the entire sector, the assessment concluded.