Industrial compound feed production for farmed animals in the European Union-28 in 2017 reached an estimated level of 156.7 million metric tons, 0.2% more than in 2016 (Table), according to data provided by members of the European Compound Feed Manufacturers’ Federation (FEFAC).

Regarding cattle feed, the end to dairy quotas in 2015 resulted in heavy contrasts in milk production and demand for dairy feed across EU member states in 2016. FEFAC said 2017 has seen consolidation of national orientations, with a positive evolution of around 5-8% in countries such as Poland, Belgium and the U.K.

The drought on the Iberian peninsula (Spain and Portugal) affected the forage supply, resulting in higher demand for compound feed, FEFAC said. Overall, the recovery of milk prices encouraged dairy farmers to resume purchases of high-performance feeds to maximize milk production, which resulted in an aggregate increase in EU cattle feed production of 1.0% in 2017.

Concerning poultry feed production, FEFAC said the avian influenza outbreak in 2017 severely affected some poultry-producing regions of Europe, especially duck farming for foie gras in France and Hungary. A number of EU countries saw their poultry feed production stabilize or even slightly decrease, with the noticeable exception being Poland, which recorded 7% growth for the third year in a row, FEFAC noted. All in all, EU poultry feed production remained almost stable and is still the leading segment of the EU's industrial compound feed production, well ahead of pig feed.

On the pig feed side, the setback recorded in 2016 was repeated in 2017, decreasing 1% -- in line with the change in EU pork meat production in 2017. Global demand for pork (particularly from China) supported the recovery of market prices in the EU, FEFAC said. However, this did not translate into a recovery of pig production, in particular due to the still persistent effects of African swine fever (ASF) in Eastern Europe.

Compound feed production in the EU-28, mmt

Across species sectors, for the fourth year in a row, Poland was the best-performing country, with annual growth in total compound feed production of 7.5%, boosted by demand for poultry feed as well as dairy feed, FEFAC reported.

Among the largest compound feed-producing countries, FEFAC said Germany, the Netherlands and Italy maintained their production of compound feed, whereas France and Spain recorded drops of 1% and 3%, respectively, and the U.K. increased its production by almost 2%. Germany strengthened its position as leading EU country in terms of total compound feed production, ahead of Spain and France.

The final estimate and detailed breakdown of the 2017 figures will be issued in June 2018 on the sidelines of the annual FEFAC general meeting.

2018 market outlook

FEFAC market experts are relatively optimistic concerning industrial compound feed production in 2018. The dairy sector still needs to recover from the severe milk price crisis and get rid of the vast stocks of skim milk powder, leading FEFAC experts to anticipate a stabilization of the demand for cattle feed.

A number of factors will weigh in on the development of EU pig production. Present figures show an expansion of the sow herd. However, the effective development of pig meat production and the subsequent demand for pig feed will also depend on global demand for pig meat, which is expected to stabilize. Furthermore, the development of national/local legislation on manure and phosphorous emissions may have an impact, so stabilization of pig feed production can be anticipated.

While poultry exports will continue to be affected by restrictions in third countries due to avian influenza, the persistent trend to increase in consumption of poultry meat in the EU is expected to support demand for poultry feed, leading to a projected increase of 1% in 2018. However, this could be constrained by a trend in certain western countries to reduce the stocking density in poultry holding triggered by animal welfare concerns. Overall, this would lead to a moderate 0.5% increase in compound feed production in 2018 compared to 2017.

A number of parameters are likely to affect this outlook. The evolution of outbreaks of avian influenza and ASF will be decisive, especially in terms of preserving EU export capacities.

Farm animals in the EU-28 consume an estimated 480 mmt of feed a year, about 30% of which is produced by compound feed manufacturers.

FEFAC represents 23 national associations in 23 EU member states as well as associations in Switzerland, Turkey, Serbia, Russia and Norway with observer/associate member status.