RSS
Twitter
Linked In
News In
News
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Pig market woes to drag EU feed volumes lower in 2016

Twitter Linkedin

European Union pig feed demand, already at a decade low, is poised for a further "significant" decline as poor margins hurt pork producers, with a mild start to winter boding ill for cattle feed volumes too.

Compound feed produced for pig farmers will drop by 2-3% this year, equivalent to some 1.0-1.5m tonnes, thanks to expectations of contraction in the EU pork industry, for which the hit from weaker world prices has been exacerbated by Russia's ban on imports.

Russia accounted for 23% of EU pork exports in 2013, before Moscow stopped the imports on swine fever grounds, before its broader ban on agricultural imports from countries which imposed sanctions on Russia over its role in causing Ukrainian unrest.

EU pig prices, as measured by the European Commission's reference price, last month touched a 10-year low of E126.02 per 100 kilogrammes, although values since staged a small revival, helped by the onset of a fresh Private Storage Aid price support scheme.

The first day of the scheme, on January 4, saw applications for 35,300 tonnes of pork and fats – more than half the amount stored in the whole of the previous programme, which ran over two months last spring.

'Significant reduction'

"A significant reduction in pig feed demand can be expected [in 2016], in line with expert forecasts on pigmeat production in the European Union," said Fefac, the European compound feed manufacturers' federation.

EU compound feed output 2015 and (year-on-year change)

Poultry feed: 52.7m tonnes, (+2%)

Pig feed: 49.2m tonnes, (unchanged)

Cattle feed: 42.1m tonnes, (-1%)

Total (includes others): 156.1m tonnes, (+0.2%)

Source: Fefac

"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," the federation added.

'Hardly visible'

Cattle feed demand will also drop in 2016, by 1%, matching the decline last year, and reflecting mild autumn and early-winter conditions which have allowed herds to be kept outside on grass for longer than normal.

"So far, the weather conditions have been very favourable to forages in northern Europe with relatively warm temperatures, which should weigh on the demand on cattle feed," Fefac said.

While EU milk production volumes have been on the rise since the lifting of quotas in April, the impact for feed producers has been "hardly visible" thanks to the weather, and the concentration of increased output in countries such as Ireland which rely largely on pasture for feeding cattle.

Poultry growth

Poultry feed production will buck the negative trend in bovine and porcine markets and show a 1% increase this year, after a 1.7% increase to 52.7m tonnes in 2015.

"Market experts… foresee the upward trend in poultry feed demand to persist," Fefac said, with the industry supported by the popularity of chicken, which has gained market share thanks largely to its cheaper price than red meat, with some observers seeing a boost from health considerations too.

Indeed, Poland, the largest EU broiler producer, saw its overall feed output soar 4% last year, "boosted by the demand for poultry feed", Fefac said.

Still, overall EU feed output will fall by 0.5% this year, from the 156.1m tonnes produced in 2015, thanks to the weaker cattle and pig markets, the association forecast.

A drop would mark only the second decline in seven years.

By Agrimoney.com

Twitter Linkedin
Related Stories

Hedge funds turn net bullish on ags - ahead of price drop to historic low

Speculators are wrong-footed in soymeal, in which they hike bullish bets just before a price tumble. But they fare better in cotton and cocoa

December makes poor stab of bringing festive cheer to ag bulls

This might have been the month when grain prices began a "breakout", higher. Instead, ag prices are hitting their lowest in at least 26 years

Soft commodities better bets than grains for 2018, says Commerzbank

Indeed, investors are overrating prospects for corn and wheat futures. But cocoa futures have scope for gains, and coffee could see a "price surge"

Evening markets: Brazilian travails send coffee, soybean and sugar futures lower

... while Canada’s crop upgrade sends wheat to a fresh contract low. But cotton spares blushes for ag bull, hitting a seven-month high
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069