Houghton and Tony Evans, added: “Brexit continues to be the elephant in the room and is likely to continue to be a frustrating process for some years to come. “Establishing certainty, positive or negative, will be helpful for


most dairy businesses. However, given that our Government appears to pursue a cheap feed policy, it might not be unreasonable to assume further trade liberalisation and therefore greater competition in the future.”


Compound feed suppliers who already operate across the EU


could take the view, of course, that Brexit-driven shifts of production between the UK and the remaining EU-27 members won’t matter that much going forward. That’s provided the total market for feed remains the same as before, at the very least. While possibly a correct assessment for 2018, the knock-on effects


of Brexit on the EU suggest a longer term shake-up of the feed market could follow. UK politicians are desperate to secure new trade deals, if only to prove the wisdom of the Brexit decision. EU leaders are equally determined to display their 27-member negotiating strength by beating the UK to many of the same new trade deals. Recent history doesn’t point to such deals being easy to either


agree or implement, of course. The EU’s seven-year process to conclude a trade agreement with Canada was officially signed off at the end of October 2016, the end point only being reached after diplomats managed to overcome an almost fatal objection by the Wallonie regional government (part of Belgium). Not surprisingly, implementation of the EU/Canada agreement is still proving to be a painfully slow operation. The next desire in Brussels was to complete an equivalent


deal with the Mercosur trading bloc (Brazil, Uruguay, Paraguay, and Argentina), an ambition which remains mired in EU farmer-led protests that such a move would open the EU-28/27 to an unacceptable volume of meat imports at price levels which would undermine domestic EU production. Add potential new trade deals involving Australia and New


Zealand into the mix, with separate EU and UK discussions already well underway with both countries, and the scope clearly exists for some very significant shifts of production from Europe to the other side of the world. For those seeking to plan ahead, the good news is that these


deals clearly don’t get done quickly. In addition, even when they are concluded, they don’t tend to be translated into real trade without a reasonable transition phase. Having said that, once a farm production shift begins, the process


usually runs its course whatever new facts, figures and initiatives are thrown at it. The EU’s ending of dairy quotas in 2015, for example, still justified


a significant mention in FEFAC’s 2017 compound feed summary, highlighting the commercial ripple effect of such decisions. According to the summary, written two years on from the ending of


dairy quotas, this change in EU policy has “resulted in very contrasted evolutions of milk production and demand for dairy feed across EU Member States”. For those tempted to say that we’re only talking about two years


or so, it’s worth adding that we’d all known since 2003 that milk quotas were going to end in 2015. Maybe that’s the ‘you have be warned’


PAGE 10 MARCH/APRIL 2018 FEED COMPOUNDER


timescale we should now be applying to Brexit, UK/EU trade talks and just everything connected with EU/US or UK/US trade agreement hopes and fears, especially given President Trump’s much-repeated America First negotiating stance. In truth, we’ve probably already passed the point where any worthwhile trade deals with the US will be done on the current President’s watch, even if that extends into a second term. In addition to such views and opinions, as influenced by political,


climatic and disease unknowns, we also have a pretty active scene at present in relation to changing feed sources, some for inclusion in compound rations and some as potential new competitors to our established ingredients. Living a few kilometres from a major French sugar beet factory,


I’ve grown used to queuing behind local farmers delivering their latest load of beet for processing, cashing in on their first year of quota-free production. According to EU statistics, sugar production in the 2016/2017


marketing year totalled 16.84 million tonnes, while the current harvest was expected to be roughly 20% higher at just above 20 million tonnes. Although the EU’s main focus has been on the sugar market impact


of this change, it has obviously also added substantially to beet pulp supplies for animal feed. Another animal feed option which appears to be on the rise is


sorghum, judging by the formation of Sorghum ID, a new professional platform for the promotion and development of the crop’s production and use in the EU. Headed by Daniel Peyraube from the European Maize Producers


Organisation CEPM as its first president, the new platform has representatives from FEFAC and ESA (European Seed Associations) as its vice-presidents. FEFAC presented the main features of the feed industry in Europe


and stressed that: “Although sorghum has not been used significantly in animal feed in Europe, some characteristics of sorghum such as the low incidence of mycotoxins, the low requirements in water and pesticides as well as good yield make this crop a potential interesting option to address the challenges faced by the EU agriculture and livestock sector.” The new platform, meeting for the first time in mid-January, agreed


there is a “scope for further research in characterising the nutritional value of sorghum”. Another feed-related development, based in Brazil, is definitely


worth a mention. The project in question, unveiled in January 2018, concerns a $100 million expansion of Brazil’s first corn ethanol production facility. Although not primarily aimed at the animal feed market, the new development will result in an extra 400,000 tonnes of corn ethanol by-product being made available to help feed Brazil’s growing livestock industry. If the EU succeeds in pushing through its Mercosur trade


agreement, therefore, it’s easy to see how the feed sector ripples of a pioneering renewable energy project in South America could soon be felt in Europe. The fact that market experts in Europe are “relatively optimistic”


concerning industrial compound feed production in 2018 is therefore encouraging for the sector, but clearly not to the point of being able to put your feet up and relax, just yet, anyway.


Comment section is sponsored by Compound Feed Engineering Ltd www.cfegroup.com


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