AHDB report: Decline in cereal use in UK feed forecast on projected herd culling or producer exit

By Jane Byrne contact

- Last updated on GMT

© GettyImages/nitrub
© GettyImages/nitrub

Related tags: Wheat, barley, oats, Maize

Total cereals demand for UK animal feed production next year is likely to be 247K tons lower than 2020/21, coming in at 12.990 Mt, according to a new report.

“Total cereals usage for animal feed is projected to decline, particularly in the second half of the season, as high costs and labor and logistical shortages may result in some producers rationalizing herds or exiting the industry,”​ reads the publication, the first official estimates for UK cereal supply and demand​ for 2021/22 from AHDB and Defra.

Animal feed production as a whole is expected to decline, driven by a fall in production by compounders, as per the market outlook.

Wheat usage set to increase

Wheat usage in animal feed, however, is expected to rise by 1.207 Mt on the year, to 7.206 Mt, returning to volumes more in line with the 2018/19 and 2019/20 seasons, noted the publication.   

"Much of this will depend on the discount barley achieves relative to wheat, which has reduced after the peaks recorded during July and August."

Poultry feed production is expected to stay largely in line with 2020/21, with increases early in the season balancing declines projected in the second half of the marketing year. “Wheat usage in integrated poultry unit (IPU) feed production is also forecast to increase this season, driven by an increase in wheat inclusion in rations, rather than an increase in overall demand.”

From July to September 2021, the UK imported 607Kt of wheat compared with 724Kt over the same period in 2020. "After a historically strong start in July and August, driven by low ending stocks, September’s import pace dropped off considerably. This slower pace is anticipated to persist due to current high freight costs. As such, UK wheat imports are forecast at 1.450Mt, 40% less than 2020/21 volumes,"​ states the AHDB and Defra review.

Barley, oats and maize 

At 4.066 Mt, barley usage in animal feed is estimated to be 1.240 Mt lower than levels reported in 2020/21. However, the usage of oats in animal feed is expected to increase 10 Kt to 407 Kt.

At 1.310Mt, animal feed usage of maize is projected to decline 224 Kt on the year. “The relative price of maize and the greater availability of wheat are both reducing demand from the animal feed sector.”

Bioethanol sector 

Following the introduction of E10 in the UK in September 2021, the report forecast that the domestic bioethanol industry will be fully online during the first half of 2022, with greater use of home-grown wheat rather than maize.

Related topics: Markets, Poultry, Europe, Grains

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