Tackling a global challenge

by Chris Lyddon
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A fast increasing world population and increased demand for meat and dairy products as affluence increases around the world mean a double challenge for the world’s animal feed sector. Mario Sergio Cutait, the new chairman of the International Feed Industry Federation (IFIF) believes communication and cooperation throughout the global supply chain are the keys to tackling it.

The IFIF announced in October that Cutait, founder and president of Feed Latina, the Latin American Feed Industry Association and former president of Sindirações, the Brazilian Feed Industry Association, had been elected as IFIF’s new chairman.

“The global feed industry is one of the largest industries in the world regarding volume and regarding how much money it’s worth,” he told World Grain. “Industrial feed production is around 850 million tonnes per year, and beyond that we believe that there are another 300 million on-farm mixers. The total is more than 1.1 billion tonnes. This industry is worth $350 billion. So it’s an important industry.”

It is also a very international industry. “Today, when you talk about feed, there is no country 100 percent independent,” he said. “Every country depends on importing something to produce feed. It could be grain. It could be corn. It could be soybeans. It could be soybean meal. It could be micro-ingredients like amino acids. We depend on trade.”

IFIF is made up of national associations, feed related organizations, supplier associations and corporate members from around the globe. Overall, IFIF members represent over 80% of the global animal feed industry. It is registered as a non-profit organization in Luxembourg and was founded on Dec. 1, 1987.

According to IFIF, commercial production or sale of manufactured feed products takes place in more than 120 countries and directly employs more than a quarter of a million skilled workers, technicians, managers and professionals. Approximately 3,800 feed mills produce over 80% of the feed worldwide. Four countries — the U.S., the E.U., China and Brazil — produce over 70% of the global compounded feed, while 50 countries produce 90% of the global compounded feed.

Also, earlier this year, IFIF announced the appointment of Alexandra de Athayde to the position of executive director of IFIF based in Brussels, Belgium. She previously held positions within the Monsanto Company Corporate Affairs Department in Brazil, the U.S., and Europe. She has also worked for the Brazilian Government as Adviser to the Deputy Minister of Agriculture and Adviser to the Foreign Trade Secretary.

Animal protein consumption set to grow
“We know that the FAO forecast that the world will need 70 percent more food by 2050, but some of the largest animal protein producers believe that animal protein consumption will grow much more than food consumption by 2050, because of the changing habits in countries like China, India, and Asian countries,” Cutait said. “More purchasing power in regions like Africa and Latin America means more animal protein consumption. So feed production will grow and it means that we will need to produce much more corn, soybeans, and we will have to invest in innovation to produce more in the same space, using fewer resources like water, or even using less or having less waste.”

That means that sustainability is one of the greatest challenges facing the industry. “You have to talk about sustainability, how we can produce more using less,” he said.

He also stressed the importance of producing protein at a price people can afford. “Feed represents 75 percent of the cost of one kilogram of chicken, one kilogram of pork, one kilogram of fish,” he said. “We have to produce at an affordable cost. So we need innovation. We need anything we can to reduce this.”

Uniting the food chain
He believes that the challenge for the new administration at IFIF is to unite the whole feed chain, “from the seed to the animal protein producers.”

“We have to improve communication,” he said. “The solution for all of this challenge is to sit together and to discuss the solutions together.”

One way to do that is to work with FAO, and IFIF has a good relationship with FAO’s Rome, Italy headquarters while its members have good relationships with FAO regional offices around the world.

IFIF and FAO signed a Memorandum of Understanding (MOU) in mid-2005, leading to much fuller and fruitful collaboration between FAO and the feed industry through the services of the IFIF. “What we are doing with FAO is talking about sustainability, and we are talking about how to produce more at an affordable cost,” he said. “But we have to talk about food and feed safety. Together with FAO, we promote at least twice a year what we call ‘feed regulators meetings’ where the industry and FAO meets the food regulators from Europe, from the U.S., from Asia, from Latin America and Africa to discuss all these issues regarding feed safety, regarding harmonization, regarding sustainability. All of this is very important.”

One tool that IFIF has come up with to achieve consistent standards is a feed manual, produced jointly with FAO and called “Good Practices in the Feed Industry.” It is targeted at both the commercial industry and on farm mixers in developing countries and emerging economies as they endeavor to meet the rising quality and safety requirements of their own and worldwide markets. It has appeared in English and is being translated into other languages, including Spanish, Arabic and Mandarin.

“We’re distributing it all over the world,” he said.

At the time of his conversation with Farm Business, he was preparing to propose a strategic plan for 2012 to the board of IFIF.

“We have so many priorities,” he said. “The basis of this strategic plan will be improved communication, not only within the association but with all of the feed and food chain to be wherever we can, to participate in meetings and in congresses because we are responsible for the cost of protein. We are responsible for the safety of the feed and for part of the food. It’s a huge challenge but it’s a huge opportunity, too.”

Growing demand
He predicted growing demand for feed across the sectors.

“There will be a lot more demand for feed and, of course, poultry will continue to grow,” he said.

He also predicted growing demand for pig meat in some regions.

“We see a strong growth in dairy and beef cattle and in fish feed,” he said. “In Asia, the population were not used to dairy and beef. Now they’re starting to have beef and dairy products.”

He also noted the growth all over the world of fish farming. “There is a shortage of ocean fish and fish farming is booming everywhere,” he said. “Other species, including pet food, will continue to grow. Poultry will continue to grow because poultry will continue to be the cheapest protein.”

In some areas, regulation made it difficult to establish new production sites. “We have to because if you don’t increase animal protein production, food will cost more in the supermarket. And then we will have food security issues again.”

He called for solidarity. “Sometimes we read that people in Ireland are complaining about Brazil or people in one country are complaining against the other,” he said. “The food chain is a global chain. Feed producers are all over the world. Cereal or grain producers are all over the world. The food producers are global companies, and consumers are human beings.

“When we see countries taking some measures to protect their markets, saying that it’s a sanitary issue, for sure the consumers in these markets are suffering because they are paying a much higher price. When you have a market protected, you pay a higher price.”

Comparing the price of a kilogram of chicken around the world would show big differences. “You will see the imbalance,” he said. “It’s not fair. It’s time to think about the consumer and how to make food available at an affordable price, everywhere.”

He criticized taxation policies which make food more expensive in some of the poorer countries. “In the rich countries, the tax on food in supermarkets is lower than tax on food in the developing or poor countries,” he said. “Poor people today pay higher taxes on food than rich people.”

While the British, for example, pay close to zero on food, the tax in Brazil is almost 16%. “It’s unbelievable,” he said. “Very few people talk about it, but we should speak more about this because tax is a matter of food security in some countries.

“In the U.S. or Europe and Japan, a family spends five percent of its total income on food. There are countries in Asia or in Latin America or in Africa where food represents more than 50 or 60 percent of the family income. It isn’t fair. It is really not fair.

“We have to feed 7 billion people today, and we have the feed 9 billion or 10 billion by 2050 with changing habits. They will need much more food, much more animal protein, so we will have to produce much more feed in a sustainable way. That’s why I invite everybody from the feed chain and food chain to sit together and discuss how and where we produce it.”