Compound feed production estimates for 2016

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The industrial compound feed production for farmed animals in the EU-28 in 2016 reached an estimated level of 153.4 mio. T., i.e. 1% less than in 2015, according to data provided by FEFAC members.

Although poultry feed production was expected to perform rather well in 2016, the Avian Influenza outbreak at the end of 2016 severely impacted several poultry producing regions of Europe, in particular France where a 4% decrease in poultry feed production was recorded.

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, which has turned Poland into the largest poultry producing country in the EU. The Netherlands, boosted by the demand for dairy feed, recorded a 1% growth vs. 2015. Germany, Spain and Belgium saw their total compound feed production fall by 1-2%, whereas France saw its production drop by 4%. Germany strengthened its position as leading EU country in terms of total compound feed production, ahead of Spain and France.

Market outlook for 2017
FEFAC market experts are relatively pessimistic concerning industrial compound feed production in 2017. Poultry exports will continue to be affected by Avian Influenza, thus putting pressure on EU poultry production and subsequently the feed segment (-0.5%). Overall, this would lead to a further 1% decrease in compound feed production in 2017 vs. 2016.

Cereals market quotations are now on a moderate upward trend, after reaching a record low level in autumn 2016. However, the relatively comfortable level of end stocks at global level, the good prospects on the South American harvest and the good state of EU winter cereals plantings should maintain prices at a low level in the first half of 2017. As regards soybeans, signals from South America are positive both in terms of acreage and yields for the spring harvest. An additional positive indication is predicted increase in the US soybean acreage for 2017. Nevertheless, with the demand for soybeans and soybean products increasing at global level by 4% per year, the balance sheet remains tight.