BRUSSELS, BELGIUM —Compound feed production in the E.U. in 2015 reached an estimated level of 156.1 million tonnes, 0.2% more than in 2014, according to data provided by FEFAC members.

Feed costs remained low and even decreased compared to 2014, due to a good 2015 cereals harvest in the E.U., both in terms of quantity and sanitary status, and a largely sufficient supply of oilseed meals globally, especially soybean meal, FEFAC said. This compensated the still decreasing pigmeat quotations to a certain extent, at a time when pigmeat production continued to increase by close to 1% in 2015. At the end of the day, in spite of the economic incentive to pig farmers to use their own cereals, industrial pig feed production remained stable in 2015.

The effect of the quota regime, with a +1% milk delivery expected in 2015-16 versus 2014-15, was hardly visible for the compound feed industry E.U.-wide, with an overall 1% decrease in industrial cattle feed, FEFAC said.

Finally, poultry feed production continued to increase by almost 2% in 2015, boosted by an increasing per capita consumption of meat (+2%), which benefited primarily to poultry meat (+2.5%), FEFAC said. As a consequence, poultry feed consolidated its position as leading segment of E.U. compound feed production, now well ahead of pig feed.

Like in 2014, Poland has been among the largest producing countries the best performing, with annual growth of 4%, boosted by the demand for poultry feed which has turned Poland into the largest poultry producing country in the E.U. In parallel, Germany, France, Spain, Italy, U.K. and the Netherlands saw their total compound feed production change between -0.5% and + 1%. Germany strengthened its position as the leading E.U. country in terms of total compound feed production, before Spain and France, FEFAC said.

The final estimate and detailed breakdown of the 2015 figures will be issued in June.

FEFAC market experts are relatively pessimistic concerning industrial compound feed production in 2016. Although they foresee the upward trend on poultry feed demand to persist, although at a lower pace than in 2015 (1%), a significant reduction in pig feed demand (-2/-3%) can be expected, in line with expert forecasts on pigmeat production in the E.U. So far, the weather conditions have been very favorable to forages in Northern Europe with relatively warm temperatures, which should weigh on the demand on cattle feed (-1% expected again in 2016). Overall, this would lead to a 0.5% decrease in compound feed production in 2016 vs 2015.

Feed quotations have been on the downward trend since 2013 and the good global 2015 grain and oilseed harvest is expected to maintain this trend in the beginning of 2016. However, prudence is required, with uncertain impact of the drought in Northeastern Brazil on 2016 soybean harvest.