The European Union feed sector faces the long-term challenge of a structural shortage of protein meal, which makes it highly dependent on imported materials, notably soybeans and soymeal. At the same time, like the rest of the EU’s agricultural sector, it faces demands to be more sustainable, changing practices to fight climate change and environmental damage.
Demand for animal feed in the EU is set to increase by 2 million tonnes of crude protein in 2019-20, reaching 84 million tonnes, the European Commission said when it announced its annual feed protein balance sheet on July 1.
“Thanks to higher availability of roughage, EU self-sufficiency has improved and reached 78% for 2019-20,” the Commission said. “Still, lower availabilities of EU rapeseed (meals) put pressure on the EU self-sufficiency.”
Roughage, such as grass and silage maize, remains the main source of feed protein, representing 45% of total EU feed use, an increase of 2% compared to 2018-19, the Commission said.
“The share of all oilseed meals has decreased by 1%, representing 25% of total feed use in the EU,” the Commission said. “Finally, cereals continue to be available in ample supply, at 20% of total feed use. The EU is fully self-sufficient in roughage.
“However, for oilseeds meals, the EU only produces 24% of what it needs to feed its livestock sector.
“(The) COVID-19 crisis caused a severe drop in biofuel demand and reduced the availability of rapeseed meal (-7%), partly compensated by higher imports of soybeans. In the cereals category, more barley was used for feed (+6%). Barley was widely used due to a weak demand in the malting sector due to beer consumption dropping during the COVID-19 crisis.”
Feed industry employs 100,000
The European Compound Feed Manufacturers Federation (FEFAC), which represents national associations in EU Member States as well as those from the UK, and Norway, Turkey, Serbia, Russia and Switzerland with observer/associate member status, says the European compound feed industry employs more than 100,000 people on around 3,500 production sites. It also points out that the jobs involved are often in rural areas, with few employment opportunities.
According to the Federation’s latest statistical yearbook, which covers 2018, the value of livestock production, at €172 billion ($195 billion), was 39.6% of total EU agricultural output.
“Animal feedingstuffs, including feed materials and compound feeds, are the main input into livestock production,” FEFAC said. “Within the EU-28, about 833 million tonnes of feedingstuffs are consumed by livestock each year.”
About 559 million are mostly roughages, consumed on the farm on which they are produced. The remaining 274 million tonnes includes 70 million of cereals grown and used and the farm and feed.
“In 2018, 164.8 million tonnes of compound feed were produced by EU compounders, accounting for 80.1 % of all purchased feedingstuffs,” FEFAC said. “The value of all feedingstuffs used by EU livestock producers, including forages produced on the farm, is evaluated at €94 billion in 2018.”
The figure accounts for 37.8% of all inputs in the livestock sector. FEFAC put the total value of compound feed purchased by EU farmers in 2018 at €49.3 billion ($55.8 billion).
“The industry provides a major market for EU cereals, oilseeds and pulses,” FEFAC said. “Some raw materials are obtained from the co-products of the food industry. Other important ingredients, which cannot be grown in sufficient quantity in the EU, are imported from third countries.
“The compound feed industry has become capital intensive in recent years and makes use of a very high level of technology. Advanced methods are used to formulate feeds according to the demands of the livestock farmer — which reflects final consumers’ demand — and to control the raw materials used, the manufacturing process and the quality of the finished feeds.”
The compound feed industry is subject to a complex body of both EU and national legislation affecting almost every part of its operation, FEFAC said.
“This legislation is designed to ensure that feeds are of high quality and are safe for both livestock and consumers,” FEFAC said.
The market for feedingstuffs depends on the market for livestock products, it said. It put the production of the EU-28 livestock sector at 52.8 million tonnes of meat in 2018, including 7.9 million of beef, 23.8 million of pork and 15.6 million of poultry meat.
“Average per capita consumption of meat (including horse meat, rabbits and offals) in 2018 was 93 kg, compared to only 50 kg in the EC-6 (the six original members of the then European Community) during the late 1950s,” FEFAC said.
By the 1960s and 1970s, compound feed production was growing in the nine EC members by 7.5% a year.
“This reflected the development of the demand for animal products closely linked to the increasing purchasing power,” FEFAC said. “In addition, particularly in the pig and poultry sectors, production was becoming more intensive, requiring greater use of industrial compound feed to meet high performance and quality requirements.
“For the remainder of the 1970s, annual average growth in EC-9 compound feed production slowed down to a rate stabilizing at only 4.4%. This lower rate partly reflected the effects of the 1973 ‘oil price shock’ on consumers’ incomes.”
After a period of steady increase from the mid-1980s on, consumption of all livestock products grew more slowly, because of the saturation of the EU-15 market and because of increasing consumer concern about health matters and animal welfare, FEFAC said.
“From 1996 on, compound feed production suffered from the impact of the BSE, crisis which resulted in a 9% reduction in cattle feed in 1998 compared to 1995,” FEFAC said. “This decrease was offset by a parallel growth of consumers’ demand for white meat. As a result, compound feed production in the EU has remained almost stable since 1996. The 2004, 2007 and 2013 enlargements brought some 23 further million tonnes of compound feed to the EU production.”
New FEFAC president
FEFAC elected Asbjørn Børsting, director of the Danish Grain & Feed Association (DAFOKO), as its president for 2020-2023, at its 65th General Assembly, which took place on June 3 via teleconference.
Børsting replaced Nick Major, director of corporate affairs at ForFarmers Group and chairman of the UK input suppliers’ association called the Agricultural Industries Confederation (AIC), who had served as FEFAC president since June 2017. Børsting is also secretary general of the Danish cereal, oilseed rape and potato seed sector body, Variety Denmark.
“I look forward to representing the interests of European Compound Feed and Premix Manufacturers in these challenging times, when the European and global economy are trying to recover from the COVID-19 crisis,” he said. “I am proud of the resilience shown by our members and value chain partners in providing safe, sustainable and affordable feed to farmers and foodstuffs of animal origin to our consumers. FEFAC welcomes the EU Commission efforts to draw the right lessons from the COVID-19 crisis to safeguard food security by defending the Single Market and the CAP as key delivery mechanisms for sustainable food systems, enabling us to produce more with less, while staying competitive on EU and global markets.”
Børsting anticipates the planned launch of the FEFAC Feed Sustainability Charter 2030 at its FEFAC Congress on Sept. 24-25 in Antwerp.
“We are delighted that the Belgian National Safety Council announced on June 24 that from Aug. 1 onwards, indoor events can be organized for 400 people as long as safety measures and social distancing are guaranteed,” FEFAC said. “The Elisabeth Centre Hall in Antwerp is certainly large enough to accommodate all measures necessary.”
Børsting said the new charter would “contain concrete actions to promote animal nutrition solutions, increasing nutrient efficiency, reducing greenhouse gas emissions linked to feed production, and help reduce the need for antibiotics at the farm level. “
“We will also promote responsible and deforestation-free soy sourcing and new technologies to increase EU production of vegetable proteins,” he said. “All FEFAC members are willing to play their part in meeting societal and market expectations, knowing that feeding food-producing animals is an integral part of sustainable food systems and the circular economy due to the valorization of pastureland and large amounts of human-inedible co-products of agricultural and food production systems.”
The USDA Foreign Agricultural Service’s annual report on the grains sector highlighted the potential effect on feed of the COVID-19 crisis.
“The widespread closure of restaurants, hotels and cafeterias and the suspension of all tourist activities in most of the EU will lower consumer demand, enhanced by the almost certain economic downturn that will follow,” the FAS said. “While this will be felt across the supply chain, such a situation is likely to particularly lower the internal feed demand to an extent which is yet to be estimated.”