Cost of Farming Crisis: Animal feed production down 5%

Coming in at 5.41m tonnes, this included integrated poultry units and the lowest level of feed production for the first five months of the season since 2016/17, was recorded, according to information published by AHDB this week.

From July to November, 2022, all major animal feed categories were lower on the year, with the exception of sheep feed. The main driver of the decline was the monogastric sector, ie pigs and poultry.

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Compared to July to November, 2021, total poultry feed production (including IPUs) was down 184,000 tonnes – a decline of 7% to 2.48m tonnes. Both layer and broiler feed production reduced by around 50,000 tonnes, respectively, over the same period.

The poultry sector had been under pressure from squeezed margins, the avian flu outbreak and the cost of living crisis impacting consumer buying habits, the report concluded.

At 814,000 tonnes, total pig feed production was down 9% on the year from July to November, driven by drops in both finisher (-33,000 tonnes) and breeder feed (-22,000 tonnes). The fall in pig feed production came as the backlog of pigs on farm, caused by Covid-19 disruptions and labour shortages at abattoirs last year was thought to be relatively cleared.

For ruminants, total cattle and calf feed production was down 2% for the period, with a rise in dairy feed production outweighed by a drop in all other cattle feed. Sheep feed increased on year earlier levels, with total production 10,000 tonnes higher on the year from July to November.

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With a reduction in animal feed production also came a fall in cereal use. From July to November, wheat in total animal feed production dropped by 3%, while barley was down by 27% year-on-year.

It is expected that animal feed production will continue to decline this season, largely driven by reductions in poultry and pig feed production. And, with high input costs expected to remain this season, producer margins are going to continue to be squeezed.

On top of that, a shift in consumer buying habits is expected to continue, due to the cost of living crisis.