Poultry feed is to extend its lead as the biggest sector in Europe's compound feed industry, as animal welfare laws accelerate shrinkage in the bloc's pig herd.

Output of poultry feed grew 1.5% last year, outpacing narrowly an increase in cattle feed, and contrasting with a 2% drop in the pig sector, feed industry group Fefac said.

"As a consequence, poultry feed consolidated its position of leading segment of EU compound feed production, slightly above pig feed," Fefac said.

And the trend is expected to extend into 2013, when poultry feed output will "stabilise", but pig feed production fall a further 1%.

Pigs vs chickens

The drop in pig feed output reflects a decline in the pig herd prompted by the introduction of a series of stringent environmental and welfare regulations, at a time when elevated grain prices have already been testing producers' margins.

"Further market uncertainties are linked to the impact of the implementation of the new group-housing requirements for sows," Fefac said, saying the sector was beset by a "still-fragile economic situation".

European pig numbers have declined by more than 11m head, to 148.5m head, over the last five years, on US Department of Agriculture estimates.

However, poultry numbers have continued to rise, boosted by demand for relatively inexpensive meat, including in areas such as western and southern Africa, and Saudi Arabia, which represent major export markets.

Germany, UK vs the Netherlands

Fefac said that overall compound feed production in 2013 would remain in line with that last year, when it reached 151.9m tonnes, close to volumes in 2010 and 2011 too.

In 2012, the compound feed sectors in Germany and the UK "performed rather well", seeing annual growth of 2%.

But Dutch output fell by 1-2%, while "production of poultry feed in southern Europe was affected in particular by the implementation of the new welfare standards for laying hens".