“Chicken is what we eat when we can’t think what else to eat,”
View From Europe
By Colin Ley
Colin Ley is a British agricultural commentator who is based in Northern France. He is ideally placed to analyse the livestock agricultural and feed sector across Europe as well as the unfolding story as Brexit approaches. In this, the first of a new series of columns, Colin asks what it means to be “relatively optimistic” about the prospects for 2018.
Compound feed production increased by 0.2% in the EU-28 last year, achieving an estimated output of 156.7 million tonnes, with market specialists being “relatively optimistic” that 2018 will bring more of the same. This simple summary, provided by FEFAC members, suggests
that all is well within the European compound feed sector, a conclusion which we all know can never be that straightforward. The FEFAC summary, while obviously sound and reliable, being
based on members’ assessment of what happened in their own businesses last year, is best viewed as a starting point for discussion and business planning for the year ahead. The fact that 2017 yielded a little bit of growth for the sector was, in
itself, impressive, especially given the localised and sporadic impact of a range of issues which not even the brightest compound minds could have forecast with any degree of certainty in January 2017. Major market shifts during the past year were caused by drought
on the Iberian peninsula, Avian Influenza across many poultry producing parts of Europe and the continued presence of African Swine Fever in Eastern Europe. All we can really be sure of in 2018 is that one, or maybe all, of
these factors will strike again over the coming months, possibly joined by something else we haven’t as yet encountered or even thought about. Shifts in production patterns and trading relationships also
impacted on 2017 production, not least the knock-on effects of the EU’s ending of milk quotas in 2015, the continued growth of poultry meat sales and a return of profitability to the pigmeat sector. The challenge for compound feed suppliers, looking forward, is
to work out what new shifts of farming and consumption patterns may appear from around the next corner. Whether it’s milk, pigs or poultry, the twists and turns of consumer
tastes will inevitably make themselves felt on farming returns, and therefore on the supply chain which supports the world’s producers. FEFAC’s view of poultry meat consumption in the EU, for example,
is that 2018 can be expected to support a further 1% rise in demand in poultry feed. That’s despite compound feed production for EU poultry ending last year at 54.4 m/t, already some distance ahead of product sales for both pig and cattle sectors. Can we really keep eating more and more poultry? The answer is
apparently yes, with the best soundbite I heard on the subject last year coming from Brazil-based international consultant, Osler Desouzart.
he told a global audience of farm and food business leaders during a late autumn symposium run by Phileo Lesaffre Animal Care in Rome. There was a whole lot more than that to his presentation, of course, but his soundbite neatly addressed the overwhelming importance of poultry meat to farmers and feed suppliers alike. Although, as each year passes, it gets harder to believe that the
growth in poultry meat consumption can continue, the evidence to date remains positive for those who make compound feeds for poultry businesses. According to UK farm business consultants, Andersons, broiler
producers are still gaining sales on the back of the continuing move towards leaner meats by Britain’s consumers. As a result, broiler chick placings increased by more than 6% in the year to July 2017, with the volume of poultry meat produced in the UK rising by more than 12% during the same 12-month period. The future also looks pretty good, as viewed by Andersons’
poultry industry consultant, Lily Hiscock, writing in the firm’s Outlook 2018 report. “The broiler sector,” she commented, “is perhaps the part of UK
farming which could scale up quickly to meet consumer demand and perhaps even increase poultry meat self-sufficiency in the UK, post- Brexit.”
Given that the UK is already the fourth largest provider of poultry
meat in the EU, with a domestic self-sufficiency ranking of 75%, that’s a strong statement of confidence in the sector’s further growth potential. The egg production side of the poultry story was less impressive
last year, of course, with the Dutch-derived Fipronil insecticide issue hitting consumer confidence. While the main egg sales impact centred on the Netherlands, the EU consumer fallout still resulted in a 0.4% dip in UK layer chick placings compared to 2016, a fall which served to highlight the always fragile nature of being part of the food business. What would happen to the EU’s 54.4 million tonne poultry feed
market, for example, if the sector’s meat image had to endure a Fipronil- style incident? It’s a big risk management question certainly. Ms Hiscock’s conclusion, nevertheless, is that there are
opportunities within the UK poultry sector for significant growth and added value, particularly following Brexit. She also noted, however, that we are now embroiled in a period of change and uncertainty during which producers should be focusing on areas of improved productivity, including making advances in feed efficiency to ensure business sustainability for the long term. Other members of the Andersons’ team delivered similar messages
on pigs and cattle, sectors which in terms of EU compound feed usage accounted for 49.9 and 43.5 million tonnes respectively in 2017. The firm’s view on pigs is that medium and longer term prospects
for the industry remain “uncertain” with much of that feeling being driven by Brexit, on both sides of the Channel. “If the UK and the EU retain tariff-free access to each other’s
markets after Brexit then output price dynamics would be relatively unaffected,” commented consultants Jonty Lister and Harry Batt. “If no such deal is concluded, then trading between the two will default to WTO rules which would have a significant impact on the UK pig industry.” Dealing with dairy sector prospects, meanwhile, consultants Mike
PAGE 8 MARCH/APRIL 2018 FEED COMPOUNDER
Comment section is sponsored by Compound Feed Engineering Ltd
www.cfegroup.com
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