Continued global grain market rally likely to reduce EU 2022 compound animal feed production

BELGIUM — The European Feed Manufacturers’ Federation (FEFAC) expects compound animal feed production in the EU to fall in 2022 by 4 million to 5 million tons, owing to the spread of animal diseases and the continued global grain market rally, fueled by Russia’s invasion of Ukraine.

EU compound feed production for farmed animals in 2021 is estimated at 150.2 million tonnes, an increase of 0.03% compared with 2020, according to data provided by FEFAC members.

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Except for the pig feed sector, all other sectors managed to stabilize/or slightly increase their production despite the continuing COVID-19 pandemic, global grain market rally, supply chain disruptions and spread of animal diseases, FEFAC said.

The EU poultry feed sector increased production by 1.1% from the previous year, recovering partially from losses linked to COVID-19 lockdown measures (HORECA) in 2020.

The EU pig meat sector in 2021 faced several challenges, including reduced demand, high feed costs and the impact of African swine fever (ASF). These challenges caused pig feed production to decrease 1.5% from 2020.

“The countries most affected were particularly Germany, France, Portugal, Spain, Austria, Slovenia and Hungary,” the report said. “The Netherlands and Belgium have continued depopulation of their pig herds in order to lower agricultural environmental emissions.”

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Cattle feed production increased by 0.2% due to increased production in Ireland, Bulgaria and Austria following a severe drought impacting grass growth.

“In Italy and Czech Republic, dairy farmers decided to buy industrial compound feed rather than mixing their feed on farms, reacting to high costs for raw materials,” FEFAC said.

FEFAC’s 2022 market outlook

FEFAC’s market outlook for 2022 predicts that the EU pig and poultry sectors will “reduce their activities due to the high cost of feed materials, lower market demand and expanding avian influenza outbreaks in several countries.”

Hence, FEFAC members estimate a 4.2% decline in pig feed production and a 3% drop in poultry feed output. Cattle feed production is expected to decrease by 1.6%.

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Overall industrial compound feed production is estimated to decrease by 2.9% (4.3 million tonnes) compared with 2021.

However, market uncertainties remain very high due to ongoing Russian aggression in Ukraine as ongoing logistical challenges on how to move existing grain stocks out of Ukraine and will continue to impact market availability in the new marketing year.

The federation recommended that feed imports mainly from the US and Canada would compensate for the loss of feed materials from Ukraine and Russia.

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