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Future Feed Availability Examined In New Study

A recent study prepared by the American Feed Industry Association aims to explain factors that may shape the future of the feed industry, including availability, cost and international demand for grains.

The Council on Food and Agricultural Resource Economics and the Institute for Feed Education and Research also contributed to the study, which identified four main areas that affect feed future: bioenergy, livestock production efficiency, foreign economic growth, and long term environmental, population and demand changes.

The advancement of biofuels and increasing demand for animal proteins in overseas markets have changed feed cost and availability, the study says. Biofuels, a "major driver" of the changing environment, saw explosive growth following Sept. 11, 2011, and a policy shift toward U.S. energy independence and biofuel production.

A pattern that has already appeared is feeding distillers grains and solubles, which was likely spurred from the growing trend of biofuel production. However, the report points out that DGS are so closely related to corn that prices for the feedstuff will change frequently, as they do with corn.

The authors estimate that within the next seven years, corn supplies will begin to be more sufficient than in the past, and ethanol blending should grow more slowly. The report says that these factors may lead to better corn supplies for livestock producers. However, the relationship between feed corn and corn for biofuel will continue to add volatility to feed costs.

The study also reports that certain sectors of the livestock industry will been able to adapt to changes in feed costs more quickly. The poultry and hog industries, for example, have shorter biological production cycles which allow for more production flexibility. The poultry industry also enjoys a larger grain-to-meat efficiency, which allows for more economical production in the face of higher grain prices.

Challenges in the long term (two to three decades) will require higher feed grain production, higher meat production and need for more global resources to produce crops (water, fertilizer, etc.).

A copy of the full report can be found here.