As global disposable income increases, consumers have developed a palate for protein. And over the past five years, the world’s feed industry has delivered. Results from the 2016 Global Feed Survey, released on Jan. 22 by Alltech, estimate international feed tonnage now at 995.5 million tonnes, a 1.5% increase over last year and a 14% increase since the Lexington, Kentucky, U.S.-based company first published Global Feed Survey results in 2011.
The analysis of five-year trends showed growth predominantly from the pig, poultry and aqua feed sectors and intensification of production in Africa, the Middle East, Latin America and Europe.
“The feed industry is an excellent barometer of economic health and, based on our five years of data, predicts economic growth more accurately than many other indices,” said Aidan Connolly, chief innovation officer of Alltech, who headed up the initiative to conduct the survey.
The Global Feed Survey assesses the compound feed production from more than 130 countries through information obtained in partnership with local feed associations and Alltech’s sales team, which visits more than 32,000 feed mills annually.
The 2016 survey showed poultry feed has the largest market share and is growing faster than any other species, with 46% of total global feed manufactured specifically for broilers, egg layers, turkeys, duck and other fowl. Connolly said this year’s survey also confirmed that corn and soybean meal are the standard feed ingredients globally.
China still top feed producer
The top 10 feed producers in the world remained the same: China, the United States, Brazil, Mexico, India, Spain, Russia, Germany, Japan and France. As a region, Europe saw the most growth, up 13 million tonnes over last year, with the largest contributions coming from Russia, Turkey, Belarus and Poland.
Down 2% from last year, China still holds the title of leading feed producer with 179.93 million tonnes manufactured throughout the country’s 8,550 feed mills. However, this is the third straight year the world’s leader has reported a consolidation of its feed tonnage production into a smaller number of feed mills.
The number of feed mills in the United States and Brazil, the second and third largest markets, also declined. The U.S. produced 172.73 tonnes from 6,012 feed mills (6,718 mills in 2014) and Brazil manufactured 68.7 million tonnes from 1,556 feed mills (1,698 mills in 2014).
According to Connolly, the consolidation of feed production into fewer mills is driven by many factors. “The Chinese, in particular, see a benefit of having fewer feed mills — lower cost, more efficient and easier to control from the perspective of traceability and food safety,” Connolly said during a Jan. 22 teleconference.
Other notable regional and species statistics from the 2016 Feed Survey are:
- Europe’s 5,545 feed mills, with Russia’s contributions, augmented their production by 22% in 2015 compared to the previous year. The Middle East demonstrated a 17% increase with 21.438 million tonnes from the region’s 719 mills. Africa, Asia Pacific and Latin America were up 5%, 4% and 3% respectively, while North America remained flat.
- Pig feed production was down 2%, with 253.53 million tonnes. Aqua, with 35.47 million tonnes, is down 5% this year, although outside of China this figure seems to relate to more accurate data collection and not a specific decline, especially given that aqua has been on the rise, up 19% overall in the past five years. Equine feed, at 8.22 million tonnes, declined 2% compared to 2014.
- Poultry feed production continues to surge with a 5% increase, now at a total 463.69 tonnes. Ruminant feed was also positive with 201.36 million tonnes, a 3% increase. Pets are up 4% at 22.59 million tonnes.
“Having met with groups such as the United Nations Food & Agriculture Organization (FAO) in Rome and the International Feed Industry Federation (IFIF), Alltech appreciates how difficult it is to collect and collate this data, but also how valuable it is on our journey to feed a planet with more than 9 billion people by 2050,” Connolly said. “With five years of work behind it, this is the most robust and reliable dataset on the sector available today.”
The Global Feed Survey outlines Alltech’s estimate of the world’s feed tonnage and trends and the company said it is intended to serve as open information resource for policy and decision makers and industry insiders alike.
E.U. compound feed production up slightly in 2015
Compound feed production in the E.U. in 2015 reached an estimated level of 156.1 million tonnes, 0.2% more than in 2014, according to data provided by FEFAC members.
Feed costs remained low and even decreased compared to 2014, due to a good 2015 cereals harvest in the E.U., both in terms of quantity and sanitary status, and a largely sufficient supply of oilseed meals globally, especially soybean meal, FEFAC said. This compensated for the still decreasing pigmeat quotations to a certain extent, at a time when pigmeat production continued to increase by close to 1% in 2015. In spite of the economic incentive to pig farmers to use their own cereals, industrial pig feed production remained stable in 2015.
The effect of the quota regime, with a 1% increase in milk delivery expected in 2015-16 versus 2014-15, was hardly visible for the compound feed industry E.U.-wide, with an overall 1% decrease in industrial cattle feed, FEFAC said.
Finally, poultry feed production continued to increase by almost 2% in 2015, boosted by an increasing per capita consumption of meat (+2%), which benefited primarily to poultry meat (+2.5%), FEFAC said. As a consequence, poultry feed consolidated its position as leading segment of E.U. compound feed production, now well ahead of pig feed.
Like in 2014, Poland has been among the largest producing countries the best performing, with annual growth of 4%, boosted by the demand for poultry feed which has turned Poland into the largest poultry producing country in the E.U. In parallel, Germany, France, Spain, Italy, the U.K. and the Netherlands saw their total compound feed production change between -0.5% and +1%. Germany strengthened its position as the leading E.U. country in terms of total compound feed production, ahead of second-place Spain and third-place France, FEFAC said.
FEFAC market experts are relatively pessimistic concerning industrial compound feed production in 2016. Although they foresee the upward trend on poultry feed demand to persist, albeit at lower rate than in 2015 (1%), a significant reduction in pig feed demand (-2 to -3%) can be expected, in line with expert forecasts on pigmeat production in the E.U. So far, the weather conditions have been very favorable to forages in Northern Europe with relatively warm temperatures, which should weigh on the demand on cattle feed (-1% expected again in 2016). Overall, this would lead to a 0.5% decrease in compound feed production in 2016 versus 2015.
Feed quotations have been on the downward trend since 2013 and the good global 2015 grain and oilseed harvest is expected to maintain this trend in the beginning of 2016.