Finding new markets while expanding existing ones was on the minds of feed industry members who attended the annual International Production and Processing Expo (IPPE), co-sponsored by the American Feed Association (AFIA), US Poultry and North American Meat Institute.
After a five-year period in which the dollar amount of U.S. feed exports declined, the domestic feed industry is eagerly waiting to see if the 2018 report shows a reversal of that downward trend.
But following a 35-day government shutdown that ended in early February, there’s no telling when that data will be released, said Gina Tumbarello, director of international policy and trade for the AFIA.
Speaking at the IPPE, an event that attracted a record 33,000 attendees from the poultry, meat and feed industries Feb. 12-14 at the Georgia World Congress Center in Atlanta, Georgia, U.S., Tumbarello said U.S. feed exports have fallen in value from $13.6 billion in 2013, to $13.4 billion in 2014, $12.6 billion in 2015 and $11.4 billion in 2016 and 2017.
She noted that of the $2.2 billion decline from 2013 through 2017, almost $1.4 billion was due to China’s value-added tax on shipments of dried distillers grains coming from the United States, a tax that was removed late in 2017.
“Almost all of that decline was one specific product to one specific country,” Tumbarello said.
Tumbarello said U.S. feed exporters have a number of obstacles to deal with in their effort to ship their product overseas.
The shift in U.S. trade policy in the last two years, which has included the trade war with China and the withdrawal from the Trans Pacific Partnership (TPA), has undoubtedly not been helpful, but strict guidelines and restrictions on imports in several countries also has had a negative impact, Tumbarello said
The recent signing of the United States-Mexico-Canada (USMCA) trade agreement (formerly NAFTA), bodes well for the U.S. feed industry, assuming the legislatures in each of the countries approve the agreement. In 2017, Canada and Mexico were the leading buyers of U.S. feed, purchasing $1.1 billion and $1 billion worth, respectively.
The Trump administration also is looking to forge new trade agreements with Japan, the European Union and possibly the U.K. if Brexit goes into effect this spring, she said.
The first two years of the Trump administration included a flurry of policies and actions that have impacted the agriculture industry, from a new farm bill, renegotiated trade agreements and increasing tension with China over tariffs, said John Stewart, manager of government affairs for the AFIA.
He said the AFIA wants to work with the administration and Congress to make sure the United States doesn’t level more tariffs that will result in additional retaliatory actions. Last July, Trump announced 25% tariffs on various Chinese products. China responded with retaliatory tariffs on U.S. products, including soybeans. Prior to the trade war, China was the top buyer of U.S. soybeans, purchasing 30 million to 35 million tonnes per year.
Another top priority for the AFIA is the USMCA, in particular how Congress ratifies the deal, Stewart said.
Congress is likely to start discussions in April but is waiting on reports from various government agencies, including agriculture, about the impact the renegotiated agreement will have.
“We’re trying to solve a lot of trade pieces all at one time, and it has been an interesting road,” Stewart said during a TECHTalk at the IPPE. “Congress has been very willing to discuss some of those, but again a lot of this authority rests with the administration.”
Several IPPE exhibitors agreed that uncertainty surrounding policies, particularly those dealing with trade, have affected the agriculture industry.
The biggest challenge right now is the export market and the ongoing trade war with China, said Grant Kennedy, GSI commercial account manager.
“What’s volatile is the decision making,” he said. “People are just not committing because they don’t know what’s going to happen in six months. Are they going to be able to move their grain, should they store it? Decisions are not being made that traditionally may have been made in the past in preparation for harvest.”
Even large grain commodity traders who have profited with exports in the past are having difficulty, Kennedy said.
“They used to worry about getting their river terminals up to speed to support the exports, but they’re not there now, so they’re kind of calling timeout on those projects as well,” he said. “It’s affecting the small farmers as well as the big commodity traders.”
Still, the Assumption, Illinois, U.S.-based company met its goals in regard to sales last year.
“Our business is cyclical like any industry is, but it is probably the most consistent,” Kennedy said.
Along with addressing trade, a top priority for the AFIA is the animal food ingredient review and approval process by the Food and Drug Administration (FDA). Currently, the process takes three to five years, costing AFIA member companies $1.5 million to $2 million per year per product in lost revenue.
One way to fix that is through increased appropriations for the FDA’s Center for Veterinary Medicine. The AFIA is working on Capitol Hill and encouraging its members to talk with their lawmakers about approving the funding.
The recent government shutdown has made things worse, Stewart said. The FDA said every week of shutdown puts it behind a month.
The government shutdown also got in the way of promised regulatory reforms, Stewart said.
“Continuing to talk about it is something that I think the ag community appreciates,” Stewart said. “I know it’s been a focus for them. There’s a lot of cogs and gears in the machine that have to turn to make this happen.”
Exhibitors showcase innovations
Still, IPPE exhibitors said they are moving forward with their growth plans, showcasing new equipment and services at the expo. The event featured 1,420-plus exhibitors with more than 600,000 square feet of exhibit space.
“We are thrilled with the excitement and energy displayed by this year’s attendees and exhibitors,” the three co-sponsors of the IPPE (AFIA, USPoultry and NAMI) said. “The expanded trade show floor and attendee and exhibitor numbers continue to complement IPPE’s comprehensive education sessions, valuable networking opportunities and extensive exhibits showcasing the latest innovative technology, equipment and services for our industries.”
On the trade show floor, exhibitors displayed the newest technology in equipment, supplies and services used by industry companies in the production and processing of meat, poultry, eggs and animal food products. Numerous companies showcased new products at IPPE, with all phases of the animal food, meat and poultry industries represented, from live production and processing to further processing and packaging.
Ag Growth International (AGI), Winnipeg, Manitoba, Canada, is growing across five platforms: food, feed, seed, grain and fertilizer, said David Postill, vice-president of marketing for AGI. At IPPE, the company was highlighting its fertilizer, feed and seed systems.
“We have some great products and some great brands,” Postill said. “We’re really happy with the companies that we’ve added that offer our customer a real complete solution.”
AGI is focused on expanding its business worldwide and has made several recent acquisitions, including Improtech, an engineering firm based in Toronto, Canada, and Sabe Group Companies, a French-based provider of processing solutions for the food, pet food, animal feed, fertilizer and biomass industries.
“It’s a really great mix of providing our customers as many products as we can to solve their problems,” Postill said.
Bühler, Uzwil, Switzerland, also is finding solutions for its customers, showcasing its Multimpact hammermill and Kubex T pellet mill. The Kubex is one of the most compact pellet mills and produces 45 tonnes per hour of poultry pellets, according to Dan Lundt, Bühler sales director, feed and oilseeds North America.
“You can fit this machine in any spots you have now,” he said. “It has lower energy consumption, no vibration, a very low level of noise, so it’s a great machine for any feed production facility.”
Bühler is a one-stop source for its customers, Lundt said, helping from concept through commissioning, including pre-engineering, permitting, electrical, installation, commission, training and customer service.
“We can support the whole process and as you go into the operation of the facility,” Lundt said.
Feed facility of the year
Famo Feeds, Freeport, Minnesota, U.S., was named the 2018 Feed Facility of the Year during the AFIA’s Feed Education Program on Feb. 13 at the Georgia World Congress Center.
Tom Beste, vice-president of Famo Feeds, accepted the award along with John Beste, president, and Kurt Marthaler, plant manager.
Tom Beste said the honor was mainly due to the dedicated employees of the family-owned company.
“I’d like to thank all the people in the company that made this possible,” Tom Beste said. “Whether they have been with us 20 or 30 years or are new employees who have come in and got on board with FSMA and things like that, this reward really is for the people in the plant, the employees of the company. I am really grateful to all of them.”
Famo Feeds produces dry feed and has served livestock producers in the Midwest since 1903. It is an animal nutrition business that manufactures and markets a full-line of livestock and poultry feeds. Serving a customer base in the Upper Midwest, the company is focused on the dairy and beef sectors but also offers feed products for horses, gamebirds, chicks, rabbits and more.
Tom Beste said the staff takes pride in the quality of its products and programs, the strength of its team and the collective impact they make in the industry.
In the last few years, Famo Feeds has made numerous improvements and upgrades to the plant, including adding a new automation system, rebuilding a pellet mill and mixer and upgrading a boiler. The new Repete FLX automation system has allowed Famo Feeds to increase its production efficiency while at the same time, improving its working environment.
Tom Beste said the company has seen almost a 10% improvement in capacity while making individuals’ jobs easier.
“Every day we build upon Famo Feed’s commitment to creating quality nutritional solutions for livestock and poultry,” Tom Beste said.
It marked the first time that the annual award, which is co-sponsored by AFIA and Feedstuffs, has been presented to a family-owned company, said Gary Huddleston, director of feed manufacturing and regulatory affairs for the AFIA.
The award recognizes overall excellence in feed manufacturing operations, emphasizes the company’s commitment to safety, quality, regulatory compliance and employee development and highlights its overall operating efficiencies.
Formerly the Feed Mill of the Year Award, the AFIA and Feedstuffs modified the program in 2016, and it is now recognized as a first-class benchmarking program for the animal food industry. Representing each of the several types of feed manufacturing facilities within AFIA’s membership, the format compares and recognizes top-performing facilities in four categories: commercial dry livestock, integrator, liquid feed and premix. From those, the Feed Facility of the Year award is selected.
The AFIA recognized the category winners earlier this month and honored them with plaques at the Feed Education Program.
In addition to Famo Feeds, which won the commercial dry livestock feed plant category, the other winners were:
- Koch Foods, Morton, Mississippi, U.S., in the integrator category
- Quality Liquid Feeds, Clovis, New Mexico, U.S., in the liquid feed plant category
- Trouw Nutrition, Highland, Illinois, U.S., in the premix manufacturing plant category.
FSMA inspections under way
During the regulatory update portion of the program, Gary Huddleston, director of feed manufacturing and regulatory affairs for the AFIA, gave an update on the Food Safety Modernization Act (FSMA).
He said the industry has made great strides to become compliant with the measure and noted that FDA inspections already are taking place at the largest feed milling companies in the United States, while the smaller mills (businesses employing less than 500 workers) should expect inspections to begin in the fall of 2019.
“The best preparation for an inspection is have familiarity with the rule,” Huddleston said.
Huddleston said based on the feedback he’s received from companies that already have been inspected, pest control is a major focus, inspectors will ask to see documentation that PCQI training has taken place, and they also will ask to see records of complaints filed at the facility.
He said facilities need to understand that their only obligation is to share complaints with the FDA that are related to feedsafety.
“It’s important to put feed safety complaints in a separate file,” Huddleston said.
He said members should be prepared to share their Hazard Analysis and Food Safety Plan with FDA inspectors.
“Most AFIA members are now in compliance with FSMA,” Huddleston said, adding, “A lot of companies in our industry were thinking about feed safety issues long before FSMA came along.”
Leah Wilkinson, vice-president of public policy and education for the AFIA, said the inspection is lengthy.
“Inspectors are there three to five days,” she said. “It’s going to take some adjustment from the industry side. We don’t just let them walk around the facility. We’re escorting them and must be there to answer their questions, so you have to be able to produce a safe, high-quality, nutritious product for the customer and do that while the government is there to inspect them.”