Miller Magazine Issue: 134 February 2021

87 MARKET ANALYSIS MILLER / february 2021 tion in the US. Assuming a continued upswing in aggregate meat consumption, global feed use is forecast to increase by 1.6% per year, to 755m t in 2025/26, equivalent to 59% of total maize uptake. Predicted gains in meat demand are associated with rising population and incomes, notably in developing countries. Still, demand growth is anticipated to fall short of rates seen in the previous five years, partly because of expected slower economic growth in some regions, per capita saturation in some mature markets, as well as changing dietary preferences due to health and environmental considerations. Furthermore, fe- eding of maize in some countries, notably in the EU, may be contained by competition from wheat. China is set to remain the top feeder amid expan- ding demand from its consolidated and moderni- sed hog sector, coupled with potentially robust use by poultry producers. While growth in uptake may soften as internal meat supplies recover, tightening maize availabilities could see some users turn to substitutes, including feed-grade wheat, sorghum and barley. Although meat imports by China may moderate over time, escalating demand elsewhere should prop up feeding in meat exporting countries, inclu- ding Argentina, the EU, the US and Brazil. However, rising use of distillers dried grains (DDG), a co-product of ethanol production, may cap advances in the latter. Medium-term growth in world industrial uptake is fore- cast to average 2.6% per year. This is up from the average of 1.5% in the five years to 2020/21, partly reflecting a continued rebound in US ethanol production in the early half of the outlook period. The global expansion in maize-based ethanol is likely to be led by Bra- zil, where, aside from ample feedstock supply and firm demand for industrial co-products, production is seen supported by the National Biofuel Policy (Re- novaBio). In the US, exports are set to drive total ethanol output in the coming years, while advan- ces in domestic fuel ethanol are seen contained by infrastructure blending constraints and declining gasoline use. Nonetheless, the US forecast holds a significant upside potential, tied to the pace of int- roduction of biofuel blends above 10% (E10), as well as renewed ethanol sales to China. The EU and Canada could see modest increases in fuel ethanol output due to contracting fuel pools and competi- tion from electric vehicles, coupled with regulatory caps on usage of food-based feedstocks in the for- mer. China is also expected to boost the output of ethanol, but processing of maize for biofuel is seen constricted by limited local feedstock supply and an envisaged shift to non-grains feedstocks, such as crop and forest residues. Food consumption of maize is predicted to rise steadily, although at a below-trend average rate. Maize is set to remain a staple in diets in some developing countries, especially in sub-Saharan Africa, but further gains may be pared by continued shifts in dietary preferences, including to wheat- and pulse-based products. Trade World trade (Jul/Jun) is predicted at new peaks each year up to 2025/26. Expanding animal feed demand, predo- minantly in developing countries, coupled with adequate Source: IGC Maize production in selected countries Source: IGC Global wheat supply and demand