Interview with AGRAVIS expert: Market for feed additives changing

The globally growing production of meat and dairy products to satisfy the growing demand from consumers – above all in Asia and South America, but also in Eastern Europe – has not only driven the market development of cereals cereals and oil seeds over the last decade, but has also ensured increasing demand for additives for animal feed animal feed .
Dr. Elke Müller-Mussmann, AGRAVIS expert for special feed products, takes a look at the current situation.

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Dr. Müller-Mussmann, how is the development of the market for feed additives?

Overall, the increasing demand has led to a corresponding expansion in global production capacities for feed additives. However, these markets are pleasingly less subject to the influence of the weather and the related annual speculation than the quantities and qualities of the harvests. The markets for feed additives still contain risks and surprises however.
For example, the simultaneous failure of one or more production plants belonging to the relatively few manufacturers or a shortage of various raw materials or production stages can may lead to unexpected shortages and jumps in prices for individual additives.

What materials are particularly affected?

Last year – especially in the second half of 2014 – the short supply of raw materials and precursors, as well as the use of existing production capacities experienced strong effects from the developments of the market for amino acids. As a result, a historically high price was reached for methionine. Meanwhile, the situation seems to have relaxed, however. There is a justified hope for the first half of 2015 that the market will behave normally and there will be a general weakening of the price level for methionine.

What about trace elements that are needed for feed production?

Die Metallpreise für trace element, insbesondere Kupfer, Zink, Eisen, Mangan and Selen, zeigen im Börsenhandel einen fallenden Verlauf. Der Preisverfall auf Dollarbasis wird jedoch durch die Talfahrt des Euro nahezu ausgeglichen. Dort ist im ersten Quartal 2015 von einem nahezu unveränderten Preisniveau auszugehen.
Bei den feedphosphaten wird mit steigenden Preisen gerechnet. Die Erwartung der Produzenten für das nächste Quartal liegt aufgrund der unverändert hohen Herstellungskosten and gestiegener Rohproductkosten bei einer Preissteigerung von fünf bis zehn percent.

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