Feed - meeting market demand

by Emily Buckley
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Market outlook shows growing feed demand in developing countries, overstated GM troubles and a dedication to improved feed hygiene

Increased affluence and urbanization in the developing countries will mean higher meat consumption and thus growing demand for animal feed.

Speaking at The International Feed Markets 2003 conference in London in November, Germain Denis, executive director of the International Grains Council, said that while only one-third of world poultry production in the mid-1980s was in developing countries, now that figure is more than 50%.

"Although much of the growing feed requirements may be met from domestic supplies in those countries, substantial volumes of feed grains will need to be sourced on open world markets," he said.

Denis expected China in particular to have a big impact. "It would appear that China’s wheat and maize stocks are now at levels making it increasingly likely that the country will soon return to world grain markets," he said. "In practical terms, the main questions seem to be how much, from where and when."

"For many years, the role of China’s grain and livestock sectors has often left market analysts and operators perplexed," he said. "As Chinese consumers benefit from overall economic growth, there has been the same kind of diet diversification in favor of more meat and specialty products as it has been occurring in other countries. In the 1990s alone, there was a doubling of meat consumption in China."

But while imports of soybeans have exploded, the last time China made large-scale wheat imports was 1996. Denis expected China to return to the world market before long, noting a run down of stocks in that country "in the last three years by as much as 120 million tonnes of wheat, coarse grains and rice."


While feedgrain trade is forecast to be on the rise, concern about genetically modified organisms in cereal grain looks to be declining.

European consumers are not really as panicked about genetically modified food as some pressure groups would have you believe, Roger Gilbert, secretary general of the International Feed Industry Federation, told the conference.

"For us the GMO discussion is quite simple: if the consumer wants animal proteins produced from GM-free feed materials, then we will provide them," he said. "Today, our industry has no problem in meeting that demand. However, it’s a demand that is largely restricted to North Western Europe."

Gilbert said he had asked companies in Belgium and the Netherlands how demand for non-GM feed was progressing. One had gone as far as to certify its plants as GM-free zones.

"The company I spoke with entered this market following Greenpeace actions, demonstrations from pressure groups and NGOs (nongovernmental organizations) over the past three years — including a feedmill occupation by demonstrators that ultimately led to a demand (from consumers) for meat from livestock fed non-GMO feedingstuffs," he said. A food retailer had asked the feed company to supply a GM-free feed (containing less than 1% of modified ingredients in the final product) to farmers who supplied the retailer with meat product.

"Today the discussion and support for GM-free feeds has diminished, and the company in question does not see an increase in retail demand," he said. "Instead, the supply of GM-free feeds to this consumer segment helps the company maintain its preferred supplier status."

Anti-GM sentiment is fading, Gilbert said. "As GM foods begin to appear on supermarket shelves there is already an underwhelming response from consumers," he said. "In one recent Dutch supermarket, the general manager did not even know that he was carrying a GM-labeled sauce on his shelves."

Even if the customers want non-GM feed, it is not certain they would be able to get the ingredients. "It has fallen to Brazil to take on the mantel of the world’s GM-free soybean provider," Gilbert said. Yet Round-Up Ready soybean seed is widely used in the northern production areas of Brazil and is set to spread throughout the country. "Past estimates put GM production in Brazil at some 35%. But a more realistic and up-to-date estimate suggests it’s closer to 25%."

"Brazil may have wanted to be the supplier of choice for GM-free soybeans, but no one has yet been prepared to pay her producers any more," he said. "The market has come to rely on ‘soft’ identity preservation, avoiding the added costs associated with ‘hard’ IP. As producers receive the same return for GM as for non-GM soybeans, they are likely to change over to GM varieties sooner or later," he said.

"In Europe, the trade importers, buyers, crushers, etc., remain focused on the same critical issues as they always have — price and quality," he said. "For the European crusher of competitively-priced Brazilian soybeans, an opportunity to claim it can deliver a product made from non-GMO material is just an added benefit to the price and quality approach."


As always, animal feed safety in regards to its effect on feed markets was a hot topic. Alexander Doering, secretary general of the European feed compounders’ federation (FEFAC), gave a mixed response to proposed new E.U. rules on animal feed hygiene designed to complete the Commision’s ‘farm to fork’ approach to food safety.

He gave FEFAC’s full support to the idea of mandatory registration of all feed business operators and the implementation of good manufacturing practices incorporating HACCP (Hazard Analysis and Critical Control Point). HACCP is already widely implemented in the feed industry as part of quality assurance systems, he said. He did express some concern over the exemptions provided to farmers under the HACCP implementation. Currently trade between farmers of small quantities of feed at local level is excluded from the scope of this regulation and Member States will be allowed to establish, at national level, rules governing this exclusion.

Doering noted however that FEFAC would like the E.U. to give up the proposal for mandatory financial guarantees for animal feed. Although E.U. food law already defines the responsibility of feed business operators with regard to feed safety compliance, the proposal requires a guarantee to cover the operators’ financial responsibility for the withdrawal from the market, as well as treatment and/or destruction of any feed presenting a serious risk. Furthermore, it also covers food produced from such feed. The Commission has introduced this measure to avoid large amounts of public money from being spent in the event of future feed crises.

Companies producing food for humans do not have to give such guarantees, and Doering said he did not believe that any insurance company would cover the risk. He argued that if human food companies didn’t have to give financial guarantees, why should animal feed companies?

Table 1: Projected trends in meat consumption, 1993-2020*

Projected annual growth of total consumption

Total consumption 1993(in million tonnes)

Total consumption2020(in million tonnes)

Annual per capita consumption 1993(kilograms)

Annual per capita consumption2020(kilograms)

Developing World






Developed World






Table 2: Projected trends in meat production, 1993 -2020*

Projected annual growth of total meat production, 1993-2020

Total meat production in 2020(in million tonnes)

Per capita meat production(kilograms)

Developing World




Developed World




*Meat includes beef, pork, mutton, goat and poultry.

Source: International Food Policy Research Institute