Over the years that Feed International has been monitoring world feed volumes, the global production of diets for farm animals and aquaculture by industrial mills doubled between 1975 and 2005 (from 290 million to 626 million metric tons) before recording a further increase of more than 8% up to 2008. We can now report that – apparently against the odds – the global total has risen yet again. Our figure of 707.6 million metric tons produced worldwide in 2009 would represent an annual growth rate of almost exactly 1%.

Figure 1: World feed volumes, 1995-2009 

This may seem only a small rise compared with former years, but any increase in the world output last year looked to be unlikely during the early months. Reports reaching Feed International at the time often spoke of cutbacks because of the hangover from the high grain prices of the previous year and the pain of the international financial recession, which was driving down the consumer demand for animal and fish protein products.

Turnaround in latter part of 2009

The extent of the turn-around in the later part of 2009 is shown most clearly by the example of China. The first three months of the year had reportedly seen China’s total feed output falling by over 6% compared with January to March 2008 and even by mid-year the governmental animal husbandry department was still reporting a 5% decrease for the first five months. The carryover from the grain market of 2008 had made compound feeds seem expensive so that farmers bought less. Credit-crunch economics had reduced the growth in consumption of meat by urban inhabitants while also giving small to medium feed mills some financial difficulties. In addition, media headlines over food safety incidents had hit the Chinese market for dairy products extremely hard.

Figure 2: Regional shares 

Remarkably, only three months later the situation was looking totally opposite. When the China National Grain and Oils Information Centre compared the first eight months of 2009 with January to August 2008, it concluded that overall Chinese feed production had risen by no less than 24%. There were even fears that corn supplies would not be enough to keep pace with the demand.

200 MMT in China may be possible by 2015

One of the largest feed manufacturers in China projected an all-feeds volume (compounds, concentrates and materials) of 130 million metric tons nationally for the complete 2009. Some forecasters have even indicated that they now think 200 million metric tons/year to be possible by the year 2015. For comparison, statistics presented at the 2009 annual meeting of the International Feed Industry Federation (IFIF) by the China Feed Industry Association gave a national total for all feeds that rose from 123.3 million metric tons in 2007 to 136.7 million metric tons a year later.

“The domestic feed industry is developing at a relentless pace,” the association commented. “There are clear indications of the cutback in the international marketplace due to the financial crisis. However, feed output at home is continuing its rapid growth.”

The most recent confirmed data for China show a total of 95.61 million metric tons produced in the first nine months of 2009, representing a 24.2% increase from the first three quarters of 2008. September’s monthly output alone had been 12.88 million metric tons, which meant a rise from the September 2008 level of 17.3%.

Advertisement

Figure 3: Evolution of feed manufacturing tonnages 

A fast pace of growth in August-September was predictable, leading up to the national and mid-autumn festival holidays that took place in early October. But the rate of increase surprised the industry. Demand has slowed inevitably since the holiday time, but it was still clear that the final 2009 numbers would reveal an annual increase despite the setbacks at the start of the year.

Latin American figures increase

Similar indications of an early decrease followed by later recovery have reached us from various other parts of Asia. Latin American figures also would generally reflect a rise.

But the trend in North America (and, to a lesser extent, in Europe) has been rather different. With significantly reduced animal numbers in both the USA and Canada, it was inevitable that less feed would be needed over the past 12 months. The estimate of a 3% drop for the US tonnage in fact looks conservative. European data maintained comprehensively by the feed federation FEFAC showed a community total of 150.57 million metric tons for 2008. Soundings from Europe that this was not matched in 2009. The federation spoke of estimates based on the first nine months pointing to a reduction of at least 4% in EU compound feed production.

Chart 1: Development of the EU industrial compound feed production 

With the USA and the EU-27 being the world’s two largest feed producers, their parallel falls of nearly equal magnitude in 2009 might be supposed to signal that the global total tonnage also declined. However, whereas their combined losses were about 12 million metric tons, on our preliminary data the Chinese gain approached double that amount.

China therefore provided more than enough compensation for the world market to show an overall increase last year. In the process it moved up to challenge for second position in our Top Places list, while the gap between the USA at No. 1 and the European Union at No. 2 became significantly smaller.