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Honored Advisor

And I thought Brazil and Argentina were going to fix this...

Global Feed Production to Contract in 2013

October 16, 2012

 

Next year for the first time ever, global feed production is expected to contract. Vice President Aidan Connolly of Alltech, an international animal health and nutrition company, presented the prediction to the Food and Agriculture Organization of the United Nations in mid-October.

Last year, the Lexington, Ky.-based company's feed production survey showed China surpassed the United States as the world’s largest producer of feed. This year’s survey, which be released in late 2012 or early 2013, covers 130 countries and will show that global feed production grew this year.

For 2013, though, Connolly predicts a contraction of 3-5 percent.

"FAO’s concern is feeding the 1 billion people who don’t have enough food to eat," Connolly said this week in an interview. "Our offices expect an overall reduction in consumption of food next year, which will have a direct impact on production of feed."

A weak global economy is depressing protein consumption.

"It’s a function of meat, milk and egg consumption," Connolly said.

The continued use of feedstocks and materials for biofuels will also cut into feed production next year. The European Union, United States and Brazil will continue to use a large portion of their feed crops for biofuels, and China and Russia are also considering converting feed into biofuels. The renewable fuel standard in the United States, which mandates that gasoline be blended with ethanol, is an ongoing concern to the feed industry.

"It has caused a lot of problems for feed prices in general," Connolly said.

The feed industry, though, argues that byproducts of biofuel industries, such as distillers’ grains, make up for the loss of raw product.

Contaminated feed

The U.S. drought will play a significant role in next year’s reduced feed supply. Alltech also conducted a survey that looked at the level of 37 mycotoxins in 150 U.S. feed samples. Connolly said that mycotoxins will be a major issue for the U.S. feed industry for the next year.

At low levels, a single mycotoxin might not be a cause for concern where animal health and productivity are concerned. But if feed is contaminated with several mycotoxins, they can reduce productivity and compromise animal health.

 

 

 

 

 

The challenge for the world’s agricultural producers and food manufacturers in 2013 will be whether they can pass the additional cost of a reduced feed supply to consumers without severely reducing world demand for proteins.

"We are facing a completely new era for the agriculture industry, where for the first time in history, feed production for 2013 will be lower than for 2012, and it is clear that efficiency in converting feed into food will be more critical to food companies than ever," Connolly said.

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Senior Contributor

Re: And I thought Brazil and Argentina were going to fix this...

Hey Hobby, hope harvest is wrapping up for you and it was fun to finally meet you last week. A comment to your post..farmers are finally getting paid for what is wanted. Back in the 70's when Earl Butz(not sure of last name spelling) told farmers to farm fence row to fence row, we figured out how to overproduce every sticken crop known to man. Now, with a few weather hiccups, all of a sudden, we might run out and just what is that last bushel or pound worth. Going to be an interesting year ahead. The world has to eat.....MikeM

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Honored Advisor

Re: And I thought Brazil and Argentina were going to fix this...

Mike, did you notice when I asked about that a simular way to the broker, I did not get an answer?

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