March 19, 2009
Spain's animal feed output seen as stable despite fall
Spain's animal feed production fell 9 percent on-year but feed compounders' group Cesfac sees 2009 output holding steady as livestock farmers return to profit.
Grain prices have declined since mid-2008, indicating cheaper feed for livestock farmers, boosting margins and profits, according to Cesfac director Jorge de Saja.
Output in 2008 was 19.91 million tonnes, and production this year should be at the same level though it is hoped that losses will be left behind, a change from the loss-incurring trend set in 2007 and 2008, said De Saja.
The animal feed sector is the largest grain consumptions in Spain, taking up 12-15 million tonnes a year in a market of about 29 million tonnes.
The credit crunch was also limiting feed output because feed producers were finding it difficult to secure credit to purchase grain and other raw materials, De Saja said.
Grain traders said weak consumption by feed producers and hand-to-mouth buying in recent months has depressed prices after an increase in January due to short-covering.
De Saja said feed producers expected the grain market to remain flat until the end of the current season, due to large supplies and forecasts of huge world harvests.
De Saja expects Brussels to reopen quotas to import corn and sorghum for Spain and Portugal at a reduced levy, and that Spain to import about 140,000 tonnes and sorghum and smaller amounts of corn under the quotas.