World Feed Panorama: Once again, industry increases its volume
Asia-Pacific countries hold the largest regional share of feed production.
Our latest World Feed Panorama survey points to a 1.3 percent annual growth in the production of compound feeds by commercial mills worldwide in 2011. This result is based on preliminary estimates, so it still needs to be confirmed once firmer statistics become known. Nonetheless, it suggests a remarkably consistent rate of expansion for the feed industry in recent times, following reported increases of about 1 percent in 2009 and almost 1.5 percent in 2010.
A year ago, our survey report said that the global output of commercial compound feeds had grown in 2010 to some 718 million metric tons. Updated information received since then has allowed a revision so that we now consider the 2010 total to have been nearer to 725 million tons. For 2011, our estimate currently is that a volume of over 734.5 million tons has been produced (see Figure 1).
Asia-Pacific countries lead
The largest regional share of world feed production is held by the Asia-Pacific countries (see Figure 2). By our calculations, the region’s own growth rate in 2011 was about 1 percent compared with a 2 percent increase in 2010. Europe is second for size. It grew its feed output by only 0.1 percent in 2011, after a 2010 rise of 2.5 percent. North America is in third place, having produced 1 percent more in 2011, following a 2 percent boost the previous year. Latin America holds the fourth spot, following a near-3 percent growth in 2010, with an increase of more than 3 percent in 2011. Although starting from a lower level, compound feeds output in the region comprising the Middle East with Africa rose 5 percent in 2011 after 1.5 percent in 2010.
We should emphasize again here that the World Feed Panorama annual survey looks exclusively at complete compound feeds produced by commercial manufacturers in all countries. It does not include home-mixed rations, concentrates or premixes and it also excludes any unmixed materials or forages fed to farm animals.
Sources described 2011 as having been a transitional year for the commercial feed business, coming between the trauma of the spike in grain prices that hit customer confidence during the second part of 2010, and the uncertainties that now surround us regarding global economic trends in the near future. Sources added that it was also a year for maintaining feed volumes, despite generally tight financial margins per ton sold.
Data collection challenges
Furthermore, these sources wanted to draw attention to the increasing difficulty for data collection to distinguish between feed tonnages produced by mills in the commercial arena and those from integrators or from large farms making their own rations.
In some places, the home-mixing segment may account for at least one-third of the overall feed volume. The Canadian market provides an example, with the Animal Nutrition Association of Canada reporting that on-farm feed mixers add 10 million metric tons to the 20 million tons produced each year by the country’s commercial mills. In Vietnam, some 37.5 percent of all feeds in 2011 were home-mixed.
Undoubtedly, farm-mixing plays less of a role in feeding poultry than in the pig business. An analysis by Russia’s Ministry of Agriculture has concluded that at least 70 percent of poultry feeds in Russia now originate from the producers of the birds rather than from outside mills. In 2000, the feed mills had supplied almost half of all feeds for poultry nationwide.
First estimates by the European Feed Manufacturers' Federation have been that compound feed production in the EU-27 countries of the European Union slipped back by 1.5 percent to about 149 million metric tons, from the 151 million tons produced in 2010.
The federation noted a drop of 1 percent for the EU’s output of compounds for pigs together with a slippage of some 0.5 percent in feeds for laying hens. Both of these were predictable, given the decrease in pig numbers prompted by poor producer profitability in Europe in 2011, and the decision by a number of egg producers to quit the business rather than invest in the noncage hen housing systems demanded by new European Union legislation. More surprising was a finding that cattle feed production fell by 3 percent. Earlier in the year it had seemed that a dry spring would actually add to the cattle feed demand, but this was followed by a warmer than usual autumn/fall period of above-average nutrition from grazing.
France rates among the biggest of the EU members for annual feed production. Its organizations have said there was a decrease of only 0.1 percent in the total French tonnage in 2011 because poultry feed production rose by 0.5 percent, while pig feeds were down 1 percent and ruminant feed volumes hardly changed.
Our database shows Russia’s feed production up by as much as 16 percent in 2011 as grain stocks were restored, giving a current annual volume for the Russian commercial mill segment of around 17 million metric tons. Note that this differs from figures in a national agricultural ministry feed development document, in which 2010 production of compounds was given as 28.4 million metric tons (up from 26.5 million tons in 2009 and 24.4 million tons in 2008). But the ministry’s 2010 total had included 14.4 million tons for poultry and, as mentioned previously, more than 70 percent of this was made for its own use by the producers of meat or eggs. That would immediately remove 10 million tons from the amount attributable to commercial mills.
Although regional federation FeedLatina has started collecting figures (see sidebar), the most consistent reports of any Latin American feed tonnages so far have been those from Brazil’s national association Sindicato Nacional da Indústria de Alimentação Animal. At the end of 2011, it was putting the country’s latest annual feed production up 4.7 percent at 64.3 million metric tons, after rising 5.3 percent to 61.4 million tons in 2010.
Mexico produced 21 million metric tons of feeds in 2000. The national Consejo Nacional de Fabricantes de Alimentos Balanceados, Mexico's council of feed manufacturers and animal nutrition, proposed a volume of about 28.1 million metric tons for 2010. First indications for 2011 from industry sources have been of a slight downturn to approximately 27.7 million tons.
Argentina is showing most growth regionally with the expansion of the local poultry, pig meat and milk industries. One analyst contends that maize usage nationally will increase by over 7.5 percent in the 12 months to June 2012 as these sectors expand, even while beef feedlots continue to reduce their cattle numbers.
By some recent indicators, our World Feed Panorama database should be recognizing a greater level of output for Venezuela than the 3.5 million metric tons it shows currently. Local reports put the latest volume at almost 4.1 million metric tons, including 3.1 million tons for poultry and 940,000 tons for pigs.
At the 2011 annual meeting of the International Feed Industry Federation, the Animal Feed Manufacturers Association of South Africa referred to national feed production as totaling 10.66 million metric tons. The largest single slice of this, at 3.2 million metric tons, was for broilers, followed by 3.1 million metric tons for beef and sheep.
Our database is broadly in line with this indicated total by showing output in South Africa at 10 to 11 million metric tons per year. How much of this should be allocated to commercially produced compounds is debatable, but one of the country’s biggest players says 9.6 million metric tons per year.
Other countries in the combined database zone of the Middle East with Africa have been difficult to assess in 2011, not least due to the fallout from the political unrest in North Africa and Middle East neighbors. However, the inclusion of Turkey in this zone meant an overall increase could be reported because Turkish feed manufacturing is reckoned to have rocketed from 9.5 million metric tons to 11.5 million metric tons per year.
Disease issues surfaced again in 2011, hitting the feed business especially in the Korean Republic. This also affected China to a lesser degree. But the big stories from Asia last year were the floods in Thailand and the earthquake plus tsunami that devastated northern Japan in March 2011.
Remarkably, in view of the fact that the Thai and Japanese events both involved parts of those countries important to national feed and livestock production, the preliminary 2011 database numbers do not signify big cutbacks. For Thailand, 1.2 million metric tons of feeds are believed to still be achieved despite the flooding problems, and for Japan, we show a strong recovery to finish the year on 23.9 million metric tons. Korean feed tonnages, by contrast, are shown down to 15.6 million metric tons with a particularly large dip in the output of pig feeds because animal numbers had been markedly reduced.
Indonesia stands out regionally for potential. Industry authorities forecast that the 10 million metric tons of feeds produced in 2011 will be 12 million tons by the year 2014.