Feed needs expected to spark corn, wheat demand

Global feed use is expected to set a new record in 2021-22, continuing an amazing decade-long run, says an analyst.

Alexander Karavaytsev, economist with the International Grains Institute, is forecasting 1.51 billion tonnes of demand, a 2.8 percent increase over the current year.

It will be the sixth consecutive year of record consumption, despite severe outbreaks of African swine fever in China and elsewhere and a global pandemic.

Feed demand has grown by 321 million tonnes over the last decade, a 28 percent increase.

Grains accounted for two-thirds of that growth, led by increased corn use. But wheat is also coming on strong.

Oilseed meal demand is up 99 million tonnes over the past decade, with soybean meal accounting for most of the increase.

China has increased its use of soybean meal but it has also greatly boosted the consumption of corn gluten feed meal, a byproduct of the wet corn milling process.

Corn gluten feed meal use has expanded by eight million tonnes over the past decade to 20 million tonnes.

“This is a very significant volume of high protein feed, which is not always accounted for in the analysis of China’s feed demand,” Karavaytsev told delegates attending the IGC’s Grains Conference 2021.

In fact, the growth of corn gluten feed meal during the past decade has outstripped the growth in rapeseed and other oilseed meals as well as distiller’s grains.

Grains account for 69 percent of total global feed use, while oilseed meals make up 23 percent and other feeds like distiller’s grains and rice comprise the remaining eight percent.

The share for grains has dropped over the past 15 years, while oilseed meals and other feeds are getting a bigger piece of the pie due to the expansion of pork and poultry herds, which require higher levels of protein than cattle.

In 2020-21, there was a shift away from corn to other grains due to high corn prices. Wheat use is forecast to increase by more than 12 million tonnes this year compared to less than four million tonnes for corn.

Karavaytsev expects a rebound in corn demand in 2021-22 due to bigger crops in the United States and the European Union, with demand growing by 21.2 million tonnes compared to 8.4 tonnes for wheat.

“Corn is expected to regain some market share due to potentially more competitive prices,” he said.

However, the growth in wheat demand in 2021-22 will still be an impressive 5.6 percent, which is far greater than the previous five-year average of 1.1 percent.

Karavaytsev expects the growth in China’s feed demand to moderate slightly in 2021-22.

“The pig herd has already recovered markedly from the ASF crisis and that may temper growth going forward,” he said.

But China will remain a significant importer of meat in the short-term, which will support meat production and feed grain consumption in meat exporting countries such as the U.S. and Brazil.

Some threats to the continued growth in global feed demand include per capita saturation in meat consumption in developed markets, shifting consumer preferences for plant-based proteins, the push for increased sustainability in supply chains and animal welfare concerns, he said.

Contact sean.pratt@producer.com