Evolving feed value chain requirements
December 1, 2009
by Heather Lenz
Consumer trends cause changes and new requirements through the entire meat industry value chain, from end consumer through retailer, food processor, livestock farmer, feed miller and farmer.
Health is a key trend that is here to stay, and the meat industry is no exception to the rule. Customers in the western world are increasingly conscious of health issues. Numerous studies have been published linking healthy nutrition to improved health today, as well as improved prospects to live a longer and healthier life.
So are consumers actually taking the advice and improving their diets? One way people in western countries are taking steps to improve their health is by decreasing the amount of animal protein they eat. According to Business Insights, one third of all people in the European Union (E.U.) and the United States (U.S.) are actively reducing their consumption of meat.
Individuals in the U.S. and E.U. are not only decreasing their meat consumption to improve their health, they are also favoring more natural products, such as organic products or meats containing fewer additives. Some customers are demanding products free from antibiotics, artificial ingredients, chemicals and fillers.
Fresh, local products that are minimally processed and minimally packaged are also a trend in western countries. Product safety is at the top of shoppers’ minds, as is animal welfare, as consumers worldwide are voicing their demand for products sourced from healthy, well-treated animals.
In contrast, consumers in developing countries are increasing their consumption of meat as their incomes rise. According to Roger Gilbert, secretary general of the International Feed Industry Federation, most of the world population of more than 5 billion lives on less than $3,000. For every 1% increase in income in this segment, families are spending 2% more on food. This means that by 2030, developing countries will demand 252 million tonnes of meat a year, according to the United Nations Food and Agricultural Organization.
Despite their lower incomes, consumers in developing countries, such as China, Brazil and Vietnam are demanding safe, healthy meat products just like people in western countries. As incomes rise, so too will the demand for natural, ethical and convenient products.
TURNING TO INDUSTRIAL FEED
What does this mean for the livestock farmer? One ramification is that more farmers are turning to industrial feed worldwide to increase their feed conversion, increase the safety of their feed and improve the health and welfare of their livestock. According to Feed International’s World Feed Panorama 2009, “global output of feeds for farm animals and fish has grown nearly 18% in the last 10 years and by almost 15% since 2000.”
The European Feed Manufacturers Federation reports that production in the E.U. increased by 3.4% from 2006 to 2007, to 149.8 million tonnes. In the U.S., 154.4 million tonnes of industrial feed was produced in 2007.
Between 50% and 80% of animal production costs consist of animal feed, depending on the region of the world. The volatility of prices of raw agriculture products such as maize (corn) puts intense pressure on livestock farmers, and in turn, feed millers.
Industrial feed manufacturers have been working to decrease feed prices while abiding by the increasingly strict traceability requirements that in the E.U., for instance, increase the cost base. Feed millers are doing this by partnering with technology and process engineering providers, such as Uzwil, Switzerland-based Buhler AG, to determine ways to increase the safety of feed and decrease the operational cost of the feed plant.
SAFETY THROUGH PROCESSING
Safety of feed begins with cleaning. Unlike raw agricultural products, industrial feed goes through added-value processes that increase the cleanliness and safety of the end feed product. In the first step in a feed mill, the feed ingredients are all passed through the cleaning sections, where impurities such as iron, straw, paper, pieces of wood, and leaves are separated from the pure product.
After weighing the product, grinding it and mixing it, the conditioning and pelleting system ensures safe feed production. Pathogens (various salmonella species) that can occur in untreated raw materials contain an uncontrolled risk in feeding. Salmonella generally occurs in the various raw materials that are used in the feed industry. Buhler’s pellet mill has a “first-in, first-out” principle guaranteeing a narrow retention time distribution for each product batch and a high-temperature heating of the product to 90 degrees C (194 degrees F) to kill micro-organisms and salmonella.
Stricter regulation regarding meat safety has correlated into increasing requirements for farmers to be able to trace the feed which they provide their livestock. Feed production plants record the source and exact amount of all ingredients within the feed products. This enables livestock farmers to keep important records in case of a trace back.
Livestock farmers are increasing the health of their livestock population and responding to market demands for eradicating antibiotics by improving feed nutrition. Feed manufacturers are responding by seeking to work with nutrition experts to create more effective feed formulations to increase the health and feed conversion of the feed products. Technology providers such as Buhler continue to work together with nutrition specialists to ensure that the process engineering and machinery will produce the exact requirements of the feed for each species at every life stage for maximum health and feed efficiency. MEETING CONSUMER DEMANDS
When customers voice their demand for healthy, natural, convenient and ethical animal protein, they rarely realize the implications this has throughout the entire value chain. Each shift in consumer demand is pushing the industry forward, be it in Europe or in China.
As consumers in China and the developing countries in Southeast Asia increase their purchasing power, their demand for food safety, convenience, natural and ethical products will also rise.
From feed miller to retailer, each step will work to find ways to meet consumer demands, while minimizing the cost. This will lead to much more industrialization in the value chain.
Heather Lenz is marketing assistant for Feed & Biomass for Buhler AG. She can be contacted at firstname.lastname@example.org.