China’s animal feed consumption to increase in 2020/21

October 14, 2020 - China’s marketing year (MY) 2020/21 feed and residual use for all coarse grains and feed-quality wheat are forecast to increase by 6.8 million tons, a 3.2 percent increase over 2019/20, based on projected swine restocking and strong growth in the poultry and ruminant sectors, according to the GAIN report published by USDA.

Overall feed demand is forecast to recover to the 2017/18 level at around 218.9 million tons. Corn production in 2020/21 is forecast down 4 percent compared to 2019/20 at 250 million tons, mainly due to the impact of FAW, reduced planted area, and extreme weather before harvest. Corn prices continued rising since June to almost 3,000 yuan (U.S. $440) per ton in some regions in early August, hitting a 5-year high. .

Feed demand recovered, but high corn prices restrained its consumption for feed and drove substitution to other feed grains. Mills in the coastal areas reportedly replaced more than 30 percent of the corn in their feed formula with sorghum, barley, and/or wheat. The government has depleted almost all its temporary corn reserves via 15 rounds of auctions from May to September.

China may rely on corn imports and stocks of old rice and wheat to meet feed demand in the coming marketing year. The estimate for wheat consumption is adjusted higher report by 1 million tons based on higher volumes of feed-quality wheat consumption.

Sorghum imports in MY 2020/21 are forecast up by 2 million tons to 6 million as cheaper sorghum is used as a substitute for expensive corn. Early rice production reached 27.3 million tons, up 1.03 million tons, or 3.9 percent from 2019, as a dramatic increase in planted area offsets flood damage. More double-cropping area in the south will also lead to higher late rice production.