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German animal feed industry expects stable output in 2013

Published on 2 May, 2013, Last updated at 17:06 GMT
German animal feed industry expects stable output in 2013

Germany's giant animal feed industry is likely to achieve stable production in 2013 and the sector expects a large European harvest this summer to push grain prices down, an industry leader said on Thursday.

Feed makers are concerned about delayed exports of new crop soybeans from Brazil in recent weeks but still expect soybean prices to fall when large new harvests from Brazil and Argentina finally enter global markets in coming weeks, said Heinz Daske, head of the north-east German section of German feed industry association DVT.

"I believe the prospects for the feed industry are good this year and we will probably achieve the same level of production of about 23 million tonnes of compound feed we saw in 2012," he told Reuters on the sidelines of a DVT meeting.

"Raw material supplies are currently difficult as not enough new crop soybeans are coming on the market from South America," said Daske, who is also chief executive of leading Hamburg-based compound feed producer Hamburger Leistungsfutter.

"But I think the problem will be solved in the coming weeks as the Brazilians sort out their logistics problems and more soybeans come onto the world market from both Brazil and the new harvest in Argentina."

Exports of new crop soybeans from South America remain slow largely because of inland logistics bottlenecks and port congestion in Brazil.

Germany's feed industry is currently generally only buying feed grain supplies for nearby delivery dates on belief prices will fall as big harvests in 2013 are likely, he said.

"The industry is expecting a good harvest in Europe this summer and so falling prices," he said. "This means the industry is not buying forward supply cover. I think the harvest prospects are still good despite the long winter."

Germany and much of west Europe suffered a very long winter this year with frosts and cold weather well into the normal spring period which hindered crop growth.

The German Farm Cooperatives Association on Wednesday forecast Germany's 2013 grain crop of all types at 44.39 million tonnes against 45.17 million tonnes harvested in 2012 and 45.22 million tonnes forecast in March before the extended cold snap. "I do not see a supply gap before the new harvest," Daske said.

The industry did also not currently see a need to import feed wheat from the United States, which currently offers the cheapest global wheat prices.

German feed producers are also expecting overall stable demand from livestock farmers, he said. Sales of feed for poultry and beef production are expected to rise in 2013 and compensate for expected lower sales of pigfeed.

"Pigmeat production is still likely to suffer from the impact of the new European Union animal welfare rules on sow stalls," he said. "Overall there continues to be a trend towards eating more poultry especially among young people," he said.


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