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Animal Feedstuffs Market Report


Description: The animal feedstuffs market was valued at an estimated £2.17bn in 2000, decreasing slightly from its 1999 value of £2.26bn. Feedstuffs are the largest single component of farm expenditure on intermediate consumption, accounting for 25% of expenditure in 2000. Volume sales of purchased feedstuffs in 2000 were 19.8 million tonnes, again a slight decrease on the 1999 level. The UK feedstuffs market is divided into concentrates and non-concentrates, with concentrates accounting for the overwhelming majority of sales. The two largest product sectors within the market are both concentrates. These are compounds or blends, which bring together various ingredients, and straights, which are single-product feedstuffs, either processed or unprocessed. The fortunes of the animal feedstuff industry are closely linked to the farming sector. UK agriculture's experiences over the past 5 years, since the BSE (bovine spongiform encephalopathy) crisis, have been mostly negative. Farm incomes and the number of farms are declining, while livestock herds, particularly cattle and sheep, are also in decline. Only poultry numbers have been increasing. The BSE and foot and mouth epidemics created further instability in the agricultural sector. Consumer switching from meat to other foods has also weakened the markets for meat and in turn, reduced the demand for feedstuffs. Low prices and weak demand have created an industry where margins are relatively low. There was some strengthening of prices in 2001, and the move to larger farms has encouraged farmers to consider more value-added, customised feedstuff plans and dietary plans for their animals. Increased legislation and the banning of certain ingredients in feedstuffs, notably animal bone and some antibiotics, has led to some restructuring in the industry. Suppliers of alternative products, such as soya bean meal (for animal bone) and natural products (for antibiotics), are likely to benefit from these bans. In the short term, there is unlikely to be any significant growth in the UK animal feedstuff market as farm incomes and expenditure remain low. Prices for some animal feedstuffs are increasing, which should help value sales. In the longer term, demands for better-quality feedstuff products and more customised feeding programmes will help to increase value and volume sales to some extent. The strongest performing sector is likely to be poultry feedstuffs.




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