Mr Murray said the local feed market had been growing at 4 per cent a year and now constituted the largest single demand for Australian grain.

‘‘In about five to 10 years, little grain will be exported from the Australian eastern states, based on growth of the domestic feed industry,’’ he told the Australian Grains Conference in Melbourne.

Domestic feed grain requirements are now 8 million tonnes a year, led by the livestock industry.

Despite the grain harvest ‘‘jumping all over the place’’ due to drought, the domestic market represented consistency.

‘‘It will be highly valued by grain producers,’’ he said.

Mr Murray said the biggest feedstock users were beef (26 per cent), dairy (25 per cent), poultry (19.4 per cent) and pork (16 per cent).

The poultry sector is driven by feed conversion ratios — using a smaller amount of high-quality grain in a shorter time to gain faster chicken growth. ‘‘This happens across all sectors,’’ he said.

The feedlot livestock sector aims to drive conversion ratios. ‘‘That’s where they make their money,’’ he said.

Mr Murray said this trend meant increasing focus on grain quality: ‘‘They will not take any old grain - grain quality can affect processing and animal performance.’’

A worst-case scenario would be the emergence of a disease such as BSE [mad-cow disease] from poor-quality feed.

Mr Murray said grain traceability would become increasingly important, with a growing need for farm quality assurance and codes of practice covering storage, handling and transport.