World feed grain use increases

Competitive pricing boosting feed use in China, EU, US

World utilization of grains for animal feeds is forecast to resume a trend of annual growth in 2011-2012 after two seasons of stagnation, according to the latest Food Outlook global market analysis from the United Nations Food and Agriculture Organization.

Strong demand from the livestock sectors in the leading emerging economies is seen as the main driver for a projected 1.7% increase in feed grain use to 780 million metric tons. Some 637 million metric tons of this will consist of maize and similar coarse grains, according to the FAO forecasters. This would represent a relatively small annual rise of about 1% for reasons including tight supplies and comparatively high prices against more abundant and cheaper feed wheat and large availabilities of distilled dried grains.

The latest indications point to a 5.6% increase in the global utilization of wheat for feeds, up to 130.9 million metric tons, driven by more competitive prices boosting feed use especially in China, the EU and the U.S.

Overall, however, prospects in the developed-economy countries and regions are predicted to be affected by slow economic growth. In fact, rather than expanding, feed demand is expected to contract in the U.S. (reducing by 3.7%), in the EU-27 (down by 2.6%) and in Canada (lower by 1.4%).

These declines are considered to offset strong expansions elsewhere, particularly in the CIS area including Russia (up 11%) and in China (higher by 4.8%). Total feed utilization of coarse grains in the developed countries is forecast to be around 323 million metric tons, or some 0.5% less than in the previous season. By contrast, the aggregate feed use of these grains (excluding wheat) in developing countries is expected to grow by 2.5% from the 2010-2011 level, to 313 million metric tons.