21 November 2022 - In the marketing year 2021/22, Germany’s feed industry (consisting of 281 feed producers) manufactured approximately 22.86 million tonnes (pig feed was recorded at around 9 million tonnes, poultry feed at 6.36 million tonnes, and cattle feed at 6.5 million tonnes). For the 2022 calendar year, however, total feed production in Germany is expected to fall by 4-5%, according to estimates by the German Feed Association (DVT).
The number of feed companies registered in the previous year is likely to remain more or less the same; there will be some structural change naturally next year, but Dr. Hermann-Josef Baaken, management spokesman for DVT, anticipates that it will be minor.
“The German feed sector consists of many small and medium-sized regional companies and of course larger companies. These entities sometimes work in cooperation to optimise costs, and this happens under the radar,” Dr. Baaken told Feedinfo at EuroTier last week.
According to Dr. Baaken, it is difficult to predict if this will lead to consolidation in Germany’s feed industry, but he pointed out that some fundamental company ownership questions will be raised moving forward as the new generation comes in and brings with them a new philosophy of company management.
“It will be interesting to see what happens in the future,” he commented.
In the meantime, DVT’s members and the DVT itself have their ears on the ground, observing the current challenges.
For Dr. Baaken, when the Russia-Ukraine war started, it was a big challenge to adapt, but the general observation is that raw materials are available. “It is mainly a question of price,” he stressed.
“There is definitely a lack of raw materials from Ukraine but there is more trade flow with other markets and flexibility in the supply chain. The German feed industry was able to fulfil market demand and there never was a gap. Farmers always got material,” he said.
The German feed milling sector is also energy-intensive but is viewed by the government as a critical part of the food supply chain, Dr. Baaken stressed.
“The feed/food sectors benefits from the fact that other parts of the value chain have already done the groundwork. Decisions on tackling energy issues are carried over to our industry,” he said.
Regarding other challenges, the DVT management spokesman mentioned African Swine Fever (ASF), saying that there was a small number of ASF outbreaks in Germany, but it was more the bans on German pork exports which created a problem for the German feed industry.
Besides ASF, expected discussions around sustainability, deforestation legislation, animal welfare, and welfare labelling are not being finalised. “As a result, this creates uncertainty for farmers and price pressures to reduce the number of animals. The problem is that the feed sector has no influence on these decisions and so we have to wait and see,” he said.
Whatever the longer-term challenges are, Dr. Baaken argues that right now we have to realise that the costs for feed are so high that this needs to be dealt with first.
“We cannot deal with climate change without any money,” he commented.