Analyst perception: UK animal feed manufacturing hit 5-year low in 2021/22

UK animal feed manufacturing hit a 5-year low in 2021/22

Within the 2021/22 season, GB animal feed manufacturing for your complete season was 13,991,000 tonnes, the bottom stage since 2016/17, based on the most recent grain utilization statistics launched immediately by AHDB. In comparison with 2020/21 GB, the manufacturing of animal feed in 2021/22 was 3% decrease. A decline in poultry *, cattle and sheep feed manufacturing (to a lesser extent) outweighed a rise in pig feed manufacturing, resulting in a decline within the season.

In 2021/22, the entire consumption of cereals (wheat, maize, barley and oats) by GB compounders decreased by 2% in comparison with the earlier yr to five,343 thousand tons, which is broadly according to what is predicted within the final UK provide and demand estimates. By way of cereals utilized by GB compounders in 2021/22 in comparison with 2020/21:

  • Grain utilization by GB compounders elevated by 11% to three,491 thousand tons.
  • At 1.356Kt barley utilization decreased by 19%.
  • Oats the demand was 52% larger at 125Kt.
  • Corn consumption was 371Kt, down 33%.

What’s in retailer for 2022/23?

So, we talked about what occurred, however now it is time to contemplate what might occur this season.

As mentioned a number of weeks in the past in an evaluation by the analyst, animal feed manufacturing is predicted to proceed to say no this season (2022/23), largely pushed by the poultry and pork sector.

In 2021/22 we noticed a rise within the manufacturing of pig feed, however it was not essentially because of the “burgeoning” sector. As a substitute, it was the results of the lack to slaughter pigs as a result of labor shortages, which resulted within the animals staying longer on the farm. With arrears now cleared or eradicated for some and rising value of residing influencing client demand, the UK’s breeding herd is predicted to contract with declining total manufacturing. Within the newest AHDB pork forecast, UK pork manufacturing is projected to say no by 6% over the yr 2022.

The struggles that the poultry sector has confronted shouldn’t go away, in actual fact with the present “value of residing disaster” the demand for poultry meat ought to endure together with all different meats. The set up sector can also be below strain, with margins contracting sharply because of the enhance in prices, not coated by a rise within the value paid by retailers.

Feed demand for ruminants can also be anticipated to be contained this season, notably from the dairy herd. Regardless of comparatively good milk costs, it nonetheless doesn’t encourage some producers to feed extra to enhance yields as a result of larger enter prices. The large caveat with the ruminant business this season, and one to keep watch over, is the supply of forage, in addition to the climate sooner or later. The hotter, driest situations we have seen all through June, July and now by way of August have impacted forage manufacturing, because the grass merely hasn’t grown! With this in thoughts, we might even see that some producers need to resort to substitute feeding of compounds and blends as they don’t have any forage accessible. As soon as once more, the climate is at all times an remark level, if we’ve a harsh winter and / or spring and the animals can’t be chased away, this is able to additionally imply extra feed consumption. As talked about, this is among the large checkpoints for pet feed demand this season.

Modifications in using cereals?

By way of grain utilization this season, it appears possible that this yr we may have a big crop of wheat nationwide, or at the very least a big pool of fodder wheat. Whereas sizzling and dry situations could have hindered harvests some areas, a barely bigger acreage this yr than in 2021, is more likely to compensate for this.

The UK ex farm feed barley low cost to UK ex farm feed barley for spot supply is at the moment £ 35 / t (as of 28 July). This may recommend that fodder barley appears like a reasonably enticing possibility in future rations.

A chart showing national farm-gate prices for wheat and barley.

If I had written this a number of weeks in the past, I might have mentioned that corn could be broadly current in UK feed rations for at the very least the primary half of 2022/23, as a result of its relative value and availability relative to wheat. Nonetheless, with US climate considerations just lately supporting international corn markets, it has develop into much less aggressive. That mentioned, corn was a horny possibility on the finish of 2021/22 and extra was included within the rations than initially anticipated. Corn inclusions are more likely to stay comparatively supported throughout the early months of this season. It might additionally proceed to current larger ranges if climate considerations within the US subside and UK grain manufacturing is decrease than anticipated.

In 2021/22, using oats in animal feed elevated significantly because of a bumper home crop. With a extra “regular” harvest anticipated this yr, oats are more likely to fall out of favor as soon as once more.

In abstract, and with the data we’ve up to now, wheat consumption will possible proceed to be current in rations this season at comparatively excessive ranges. Nonetheless, with crop measurement questions, cheaper choices like barley and corn might snatch a few of that demand. What’s barely extra sure is that the demand for animal feed is more likely to proceed to say no this yr, pushed largely by rising prices for producers and the ultimate client. Nonetheless, there’s a caveat that feed utilization is very depending on precise forage availability this season.

* Together with built-in poultry items

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