According to Rabobank, hog feed consumption is expected to drop by 30% in 2019, as a result of the fast liquidation of hog inventory due to African Swine Fever (ASF). The hog herd will continue to decline at a much slower pace in 1H 2020, before rebuilding kicks off in 2H 2020. Therefore, a further drop of 5% in hog feed usage is projected in 2020. By contrast, other feed species – such as broiler feed, layer feed, and aqua feed – will experience positive growth rates for a consecutive two years. In our base scenario, total feed consumption will drop by 13% in 2019, before marginally rebounding by 2% in 2020.
In the base scenario, 2019 soymeal usage will reach 67m metric tons, down 4% YOY, which equals 86m metric tons of soybeans that need to be crushed. As for 2020, the base scenario projects soymeal usage at 71m metrics tons, up 6% YOY, and imported soybean needs at 90m metric tons, up 7% YOY.
- If ASF impacts were even more severe and hog feed was down 40% YOY in 2019, total complete feed would drop by 18% YOY, with soymeal usage at 63m metric tons, requiring 80m metric tons of imported soybeans.
- An additional 1% of soymeal inclusion rate in all feed will boost soymeal usage by 3m metric tons and raise soybean imports by almost 4m metric tons.
April 2019/ Rabobank/ Netherlands.