The three main factors affecting feed availability and cost are biofuels, global demand for U.S. agricultural commodity exports, and annual crop yields, according to the report “Future Patterns of U.S. Feed Grains, Biofuels, and Livestock & Poultry Feeding,” funded by the Institute for Feed Education and Research and conducted on behalf of the American Feed Industry Association (AFIA) and The Council on Food, Agricultural and Resource Economics.

More specifically, the study found that the issues most important are grain and livestock production efficiency; future bioenergy production; rapid foreign economic growth, especially in East Asia, with its implications for dietary change; demand for feedstuffs and feed availability; and long-term challenges, including global population growth, increased foreign consumption of livestock products, cropland constraints, climate change, and related issues.

“The U.S. livestock and poultry industries are working under significantly different dynamics than they were just 5 or 10 years ago,” said AFIA President and CEO Joel G. Newman.  “This changing environment will not slow up in the coming years,” he added.  In the short-term, feed availability should improve, provided weather does not impact grain production significantly.  Beyond the short-term, the livestock and poultry industries need to keep an eye on issues such as China’s demand for, not only corn and soybeans, but ultimately, meat, milk, and eggs; the development of biobutanol; and potential growth in the production of de-oiled distillers grains, the report said.

The report said “adjustments by the livestock section to dramatically higher and more volatile feed costs, the severe 2010-12 Great Plains drought, and other developments vary by species.”  For poultry, the report stated that “if feed costs move up to unprofitable levels, the poultry industry is capable of adjusting more rapidly than producers of other species.  That is because a short biological production cycle allows the poultry industry to quickly reduce production and wait for improved profit margins.  The poultry industry also has greater grain-to-meat conversion efficiency than either pork or beef.  These features likely will allow the poultry industry to grow more rapidly in the years ahead than the red meat industry, as well as to adjust more quickly to changing feed market conditions.  Domestic per capita consumption of broilers has increased almost steadily for several decades and that trend is expected to continue for the intermediate future.”

Dr. Robert Wisner, retired University Professor Emeritus, Department of Economics, Iowa State University, was the principal investigator for the study.  The report is available here.

 

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