BRUSSELS, BELGIUM — According to the preliminary statistical data provided by members of the European Feed Manufacturers' Federation (FEFAC), the compound feed production in the E.U. in 2011 may have reached a level of 150 million tonnes, 1% below the 2010 total of 151.4 million tonnes. 

Cattle and pig production has fallen, with cattle feed seeing the sharpest decline at 3%, whereas poultry feed increased by 1%, thereby confirming its position of leading segment of compound feed slightly above pig feed.

The most important factors which have weighed in on the E.U. feed demand in 2011 were the still fragile economic situation of the pig sector and the high feed material costs. As regards ruminants, the severe drought on the first months led to a lower forage harvest during the spring cut but this was offset by the good autumnal weather conditions that favored grass growth.

Most E.U. member countries saw their production fall, sometimes dramatically as in Ireland with a drop of 9%. The Netherlands saw a decrease of 5%. A few countries such as Italy or Germany managed to buck the general market trend with positive growth around 3%, supported by a surprisingly quick recovery of pig farming activity mainly due to increasing exports.

FEFAC said the high cereal prices over the last two years improved the competitive market position of industrial compound feed production vs. home mixing. However, this gain was offset to a certain extent by the development of alternative pig feeding strategies based on roughly grinded feed and liquid feeding.

As a result, Germany’s position as a leading E.U. country in terms of total compound feed production before France was strengthened, with Spain scoring third.

The final estimate and detailed breakdown of the 2011 results will be presented at the next FEFAC Annual General Meeting on June 15 in Brussels.

FEFAC experts foresee a stabilization in cattle feed production, a further reduction in pig feed production of 0.5% and a 1% increase in poultry feed demand which could be offset by a significant setback for layers feed production in certain countries, as a direct consequence of the application of the new cages standards from Jan. 1 on.

Further market uncertainties are linked to the development of the Schmallenberg virus in ruminant populations and the new group-housing requirements for sows which may lead to a significant reduction in young sows replacement in certain producer regions. Overall, compound feed production is expected to remain unchanged vs. 2011.

Feed material markets are characterized by the upward trend on soybean meal quotations due to high Chinese demand and seasonal drought in South America. Price quotations for cereals are at high levels and may remain so while experts are still evaluating the impact of February frost in a large part of the E.U. countries and while fear of a potentially severe drought in Western Europe is growing. Access to raw materials may be further curtailed by the persisting problems linked to asynchronous approval of not yet authorized GM events.