2016: Growth in EU feed production

The EU-28 (Greece, Malta and Luxembourg excluded) figures show that poultry feed production grew by 2%, whereas pig feed fell by 1% and cattle feed remained stable. On the pig feed side, after 2 years of moderate growth, the production decreased by 1% in 2016. This can partly be explained by the effects of African Swine Fever in Eastern Europe, which weighed heavily on the development of pork production, but also by low market prices for pork the first half of 2016 and large availability of feed grade cereals at low prices which benefitted on-farm mixing.

Contrasted picture for cattle feed

The picture is extremely contrasted throughout Europe for cattle feed. The Netherlands and Poland have seen their production of cattle feed increase by more than 8%, whereas France moved in the opposite direction, reflecting the diverging national milk production following the abolishment of dairy quotas. Finally, despite the Avian Influenza outbreak impacting several poultry producing regions of Europe, poultry feed production performed rather well in 2016 and confirmed its position of leading segment of EU industrial compound feed production, well ahead of pig feed.

Boost for Poland, drop for France

For the third year in a row, Poland was one of the best performing countries, with annual growth of +4.7%, boosted by the demand for poultry feed (+6%) which has turned Poland into the largest poultry producing country in the EU, but also a +8% in cattle feed. Among the other large EU producing countries, Italy, the Netherlands and Spain recorded positive results (+1.0/1.5%), whereby Germany remained stable. France has seen its production fall by 3 to 4% in all segments, these changes being due either to the shrinking of dairy production after the withdrawal of the dairy quotas or the impact of the AI in the South of France in particular. However, France remains in third position in terms of total compound feed production, although the gap with the second, Spain, has widened significantly. Germany remains the top leading country.

Little less feed forecasted for 2017

Fefac market experts are relatively prudent concerning industrial compound feed production in 2017. The dairy sector still needs to recover from the severe milk price crisis, thereby likely negatively impacting the dairy herd in 2017, while also national adjustments to meet environmental criteria play a role. These developments may lead to a reduction of cattle feed production by 0.5%. The expected stabilisation of pork production in Europe could induce a moderate reduction in demand for pig feed (-1%). Poultry exports will continue to be affected by Avian Influenza, thus putting pressure on EU poultry production and subsequently the feed segment (+0%). Overall, this would lead to a 0.5% decrease in compound feed production in 2017 vs. 2016.

A number of parameters will evidently affect this outlook. The evolution of outbreaks of Avian Influenza and African Swine Fever will be decisive, in particular in terms of EU export capacities preservation.

Source: Fefac