FEFAC, which represents 21 national associations in 20 E.U. Member States as well as associations in Turkey, Croatia, Serbia, Russia, Switzerland and Norway with observer/associate member status, said that two key factors have weighed on the E.U. feed demand in 2010:
• A partial recovery regarding consumer’s demand for animal products after the financial crisis of 2009: meat consumption in the E.U. -27 increased by 1 kg per capita in 2010 vs. 2009 but is still 3.5 kg per capita below the 2008 figure;
• The dramatic market crisis affecting the pig sector, aggravated by the high feed materials costs, which led to a stalling demand for industrial pig feed, although pig meat output increased by 2%.
FEFAC said that production trends at Member State level showed a highly contrasting picture: Germany, Belgium, U.K. and Poland saw an increase of the total feed production by 4% to 6% whereas Denmark, The Netherlands, Spain and Hungary suffered from a significant drop of industrial compound feed output by -1% to -5%. These figures are mostly influenced by the demand for industrial pig feed. Germany recovered the position of E.U. leading country in terms of total compound feed production, with a narrow lead over France and Spain (Greece, Malta and Luxembourg excluded).
FEFAC noted that farm animals in the E.U.-27 consume an estimated 470 million tonnes of feed a year, of which approximately 30% is produced by the compound feed manufacturers. The turnover of the European compound feed industry was estimated at €45 billion for 2010.
At FEFAC’s Annual General Meeting, FEFAC President Patrick Vanden Avenne said that "the European feed industry is fully committed to support the responsible development of livestock production in the E.U. and at global level, thus contributing to global food security, while safeguarding animal health and welfare.”
With a view to the E.U. 2020 “greening the CAP” agenda goal of improving “resource efficiency” in European food production and the United Nations Food and Agriculture Organization (FAO) global agenda of action to support the development of sustainable livestock production, Vanden Avenne stressed that “Safe and balanced compound feed is an essential prerequisite for the health and welfare status of food-producing animals. Feed is the most important single factor for the sustainable development of E.U. and global livestock and aquaculture production.”
FEFAC is a founding member the E.U. SCP Food Chain Round Table where food chain and E.U. Commission LCA experts are developing the principles for harmonized framework methodology for environmental impact assessments, which should be adopted in December 2012. FEFAC stressed the need for methodological choices in LCA analysis which serve the main goal of reducing feed related impacts in livestock, i.e. support the use of co-products from the food and biofuel industry.
Vanden Avenne stated that “In a situation of extremely volatile grain markets, which negatively affects the E.U.’s livestock sector competiveness, the compound feed industry plays a crucial role in fully exploiting the nutritional potential of co-products, provided they are safe for both animals and humans.”
He referred to the recent feed industry research project proposal submitted to FAO to set up a global feed ingredient database on Greenhouse Gas emissions. “I’m proud about the feed industry’s leadership offer which accepted FAO’s invitation to a global cooperation in order to improve our mutual knowledge base on the contribution and possible mitigation of GHG emissions of livestock production in order to achieve our common goal of ‘shrinking’ the livestock’s sector environmental footprint. I’m fully confident in our industry innovation capacity to achieve this goal given our long and proven history of increasing feed efficiency through improved knowledge of nutritional requirements and innovative technical solutions which help prevent and reduce nutrient losses.”
Vanden Avenne also stressed the importance of developing global and regional standard for the production of responsible feed ingredients, referring to the successful adoption of the first global RTRS standard for responsible soy in 2010.
During the annual general meeting, FEFAC experts identified the following key drivers for the compound feed market in 2011:
• the expected lower availability of forages and cereals as a consequence of the severe drought affecting key E.U. producing areas, which may trigger a higher demand for industrial compound feed;
• the practical application of the expected technical solution for the presence of GM events not yet authorized in the E.U. in feed materials imported from third countries, e.g. soybean meal, cereals and cereals substitutes if needed;
• a prolongation of the market crisis in the pig sector, exacerbated by expected high cereals quotations, considering the present expert outlook of the global cereals market for the next campaign, which will further affect the profitability of pig farmers and probably lead again to the closing of pig farms.
As a consequence, FEFAC experts foresee an increase in cattle feed production (+2%), a slight increase in poultry feed demand (+0.5%) and a further setback in pig feed production (- 1.5%). Overall, FEFAC said it expects compound feed production to remain stable vs. 2010.
“All recent expert debates within different E.U. fora such as the E.U. Council or the Enlarged Advisory Group on pig meat concluded to the strong relationship between profitability of the pig farming sector and feed costs, i.e. access to competitive feed. E.U. authorities must realize now that the pig farmers cannot wait until November 2011 for possible future market management measures to allow imports of competitive feed grains,” Vanden Avenne stressed. “The present exceptional market conditions clearly justify extending in particular the current temporary suspension of import duties for wheat and barley within the TRQs beyond the end of June 2011 and at least until the E.U. cereals harvest has been completed. Otherwise, many livestock farmers, especially pig holdings, will have to close down their operations since they cannot pass on higher feed costs to the consumer in the present market context.”
