European feed trade body Fefac forecasts that EU-27 compound animal feed production will contract by 3.5% in calendar 2022 compared to the previous year. It says the continued spread of animal disease plus the economic impact of the war in Ukraine that started in February are the main factors reducing demand.
The trade association predicts that 2022 compound feed output for farmed animals across the EU-27 will decrease by five million tonnes of 3.5% to 145m tonnes in 2022, compared to the 150m tonnes manufactured in 2021. The range of reduction amongst the larger feed producers in Europe varies from -8.8 to -1.5% year on year. Only the Baltic countries, Ireland, Poland, Bulgaria and Slovenia are expected to maintain feed production at a similar levels to 2021.
All the major species sectors are likely to see lower volumes made this year. The pig feed sector is likely to see the steepest decline with a 5.6% fall in output compared to 2021. Some EU member states report reduced national herds with some producers reducing sow numbers or even ceasing operations as production costs rise and the prevalence of diseases such as African swine fever (ASF) increases. Fefac reports that the worst affected countries are Belgium (-11%); Denmark (-9%); Portugal (-8.4%); Germany (-8%) and the Czech Republic (-7.4%). At the same time, the Netherlands and Belgium continue to depopulate their pig herds in order to reach national environmental emission targets, while Romania and Poland are worst affected by ASF.
Fefac’s analysts predict that the EU poultry feed sector will see a 3.4% drop in volumes in 2022 from the prior year. This is partly due to avian influenza (AI) continuing to spread across the EU and reduce output, especially in France, Belgium, Italy and Hungary. At the same time, European poultry farmers more generally are facing higher production costs for their feed, energy and packaging. As a result, both egg and poultrymeat producers are postponing new production cycles and flock rotations, in turn needing less feed.
A further negative factor was the EU trade policy to offer a temporary zero tariff, zero quota access to Ukrainian products in July and August, which led to significant imported volumes of poultry meat and eggs. Fefac also notes that the rising cost of living is seeing consumers trading down when shopping, with higher value lines like organic and free-range suffering most.
Cattle feed production is projected to fall by 1.3% during 2022 from the prior full year, despite increased sales of compound feeds in the dry summer months to compensate for a shortfall in grazing. France, Germany, the Benelux countries and Southern Europe were worst affected, but a shortage of forage has prompted farmers to reduce herd size and /or lactation cycle lengths – to reduce feed their usage and meet emissions targets in some member states. Fefac also warns that the disappointing EU grain maize harvest – volumes are estimated to be 19% lower than 2021’s crop will see more feed wheat used in animal rations, displacing maize.
“The increasing utility prices, economic uncertainty, increased costs linked to environmental and animal welfare policy measures and the expected persistence of animal diseases are all identified as the main market drivers for the 2023 compound feed year,” says Fefac. “A key challenge for the grain and oilseeds market remains the uncertainty over the continuation of the Black Sea grain corridor initiative and the pace of expansion of EU solidarity lanes to keep Ukrainian grain exports operational during the new marketing year.”