By Simon Duke, Managing Editor - EMEA; Additional reporting by Fei Thompson, Staff Writer - EMEA
The European feed market has been volatile these past few years and has seen its fair share of disruption, including this year (2024). Most animal nutrition industry executives interviewed by Expana journalists at last week’s EuroTier in Hannover, Germany, expect the disruption to continue in the months ahead albeit with some pressure points easing.
“We have seen a recovery in raw material prices and an easing of supply chain disruptions but there are still concerns. Challenges remain,” summed up Dr. Sven K. Weber, Vice President of Feed Enzymes and Feed Performance Ingredients at BASF Animal Nutrition.
Ivo Lansbergen, President Animal Nutrition & Health, dsm-firmenich, also said: “Raw material and energy costs are down, or at least things are a bit more balanced.”
“Energy costs were high in 2022-2023 but are better now,” echoed Dr. Dirk Hoehler, head of the Essential Nutrition product line at Evonik. He warned, however, that other countries outside of Europe have more energy cost advantages and that this needs to be considered, or deindustrialization will likely accelerate in Europe.
Patrick Charlton, Vice President for Europe at Alltech, commented: “2024 has been less difficult than anticipated.” Charlton cited factors such as increased competition in shipping, stabilized transport costs, and improved logistics as contributing to a less challenging year. “There are more boats on the water, which has created competition, driving down transport costs and freight rates. Fuel charges haven’t risen as much as anticipated, though we’ve seen significant toll increases, particularly in Germany.”
It is more the high transport and logistics costs that industry executives are concerned about now.
“Container freight rates especially have impacted imported products to Europe. Additionally, while the US port labor conflict is temporarily resolved, we need to see what impact this may have on supply and demand in 2025. Global events such as these have a direct impact on Europe as we rely on many imported ingredients in the animal feed space,” argued Adriano Marcon, President of Cargill Animal Nutrition & Health.
“The Red Sea conflict has led to extended shipping times and increased shipping rates, impacting the overall supply chain’s efficiency,” also pointed out Eduardo Alberto, CEO, Trouw Nutrition.
Also zooming in on the Middle East region, Jean-Marc Pinsault, Managing Director of Techna, highlighted that delivery times can vary between 2-3 months to the Middle East and Africa.
“The Red Sea situation was and is big for us. We can’t do much apart from putting additional volumes into containers or working on the shelf life of our bags. We must keep on optimizing,” added Rob van Schie, Sales Team Leader at Koudijs Animal Nutrition. “The Middle East is one of our main export markets,” he stated, emphasizing that one should not generalize as the Middle East consists of many different markets; many of which are not in conflict zones.
For those markets that are in conflict zones, the challenges are different. "The biggest challenge for us is trying to make long-term business plans while living day to day (Lebanon)," said Raymond Daher, Founder of Lebanese premixer Utrix. "We’ve been in this war for over a year now, and things are becoming increasingly difficult. Northern Lebanon can no longer support a livestock industry, as the people have fled, and natural resources are depleted."
Samir Yan, Senior Sales Manager for the Europe Division of Angel Yeast, said: "Freight rates have increased four to five times compared to previous years. While they are currently declining, the outlook for 2025 remains negative, with further increases expected. This ongoing volatility highlights the need for a more sustainable approach.”
“Transport costs are not going away... We need to be less dependent on overseas transport,” also commented Jan Vanbrabant, CEO of EW Nutrition.
Of note, the executives interviewed pointed out that social movements at their main ports, even though local, have been crippling.
For instance, Massoud Aoun, Manging Director at IDENA, a France-based company, said that his firm has seen frequent strikes at its main such as Le Havre and Montoir-de-Bretagne. The blockades forced the company to ship its products via Antwerp in Belgium. Meanwhile, Andreu Pintaluba Mitja, General Manager of Andrés Pintaluba, said that the Port of Tarragona in Spain has been congested for various reasons, causing extra shipment delays.
The executives were all in agreement that shifts in geopolitics are creating a lot of instability.
“It [geopolitics] has an impact on internal logistics and internal supply chains, with export rules becoming more and more difficult to address,” Pinsault highlighted.
“While we remain hopeful for continued stability, we are moving to a more unstable, unpredictable world with significant geopolitical changes in 2025,” argued Alberto.
“I expect there will be relatively less volatility in 2025. Knowing that Trump will be the next US president, there’s an element of predictability to expect in terms of the trade ramifications,” argued a more optimistic Vanbrabant.
“The world is always in a crisis, but we are learning to deal with it,” he said.
