Seven Years and Seven Insights into Global Feed Production Based on Alltech's Latest Grain SurveyFri, 26 Jan 2018 12:13:07 CST
Last year’s Alltech Global Feed Survey crossed the threshold of one billion metric tons of feed produced globally for the first time. This year affirmed that position with an estimate of 1.068 billion metric tons.
Now in its seventh year of analysis, the Global Feed Survey continues to serve as a valuable report on the state of the global feed industry. In addition to its insights into the feed industry, it serves as a barometer for agriculture as a whole and demonstrates the economic strength of the countries included in the survey.
So what lessons can be drawn from the 2018 Alltech Global Feed Survey? Aidan Connolly, Chief Innovation Officer & Vice President, Corporate Accounts has identified seven highlights representing the key trends for agribusiness leaders - from small dairy farmers in India to the largest pig producers in China.
Seven findings from Alltech Global Feed Survey #7:
1. China - The bull takes a small step back
Since Alltech’s first survey in 2011, China has been identified as the clear leader in global feed production. This year, a small decline in overall animal feed production was seen in China, but registered at less than 0.4% of the total. For a country with a growing population such a decline in animal feed production might raise an eyebrow. What does this indicate?
China’s dairy and beef feed production both declined by 17%. China’s dairy industry is struggling as milk farmers try to balance high priced inputs with poor returns from milk processors. The beef industry’s decline indicates the displacement of local production with both cheaper imports and higher quality imported meats.
China’s layer and broiler industries also saw small declines of 11% and 5% in feed production, respectively. While the poultry industry as a whole is seeing improved efficiencies due to increased industrialization, the layer industry has seen relatively rapid consolidation of the world’s largest egg market. Consumption of commercial "white" broilers has stagnated and prices have been poor.
One sector in China that has rebounded is pig feed production, increasing 11% this past year, as China’s rationalization toward larger and more professional farms reaps rewards in cost-efficient pork production.
2. Russia leaps upward
Survey saw large increases in Russia’s overall feed production as the country grows increasingly self-sufficient and less reliant on imported meat, milk and eggs. This focus on food independence has bumped Russia’s position in the top ten from number 7 to number 4 in the feed league, pushing India, Mexico and Spain each down a position, despite the respective feed production increases of each of these countries in 2017.
All species saw an increase in feed production in Russia, with the exception of minor poultry species. The primary reported growth was for pig, dairy and beef feeds. Swine feeds, in particular, were higher as more accurate data collection allowed better estimates. To some extent dairy and beef feed production reflect more precise calculations, but also difficulty in importation, particularly regarding the beef industry. The layer and broiler feed production increased also but to a lesser extent, at 12% and 3% respectively.
3. India continues to ignite
Much like China, India has been the country to watch. Its estimated 2017 feed production grew by 9%, and this growth is expected to continue with its booming population.
Unlike China, however, cultural and religious affiliations play a bigger part inhibiting the production of livestock such as pork and especially beef. The growth of India’s feed production will be primarily to support milk, egg and chicken farmers. India’s dairy and layer feed production each increased by 5% in 2017, and its broiler feed production increased by 12%.
Despite a small decline in overall global aqua production, and particularly in the overall Asia Pacific region, India was one of the few countries that grew by 8%. Today India produces shrimp, prawns, carp and catfish for both domestic consumption and export.
4. Africa still on the fast track
For nearly every year of the Alltech Feed Survey, Africa has been one of the fastest growing feed markets. Although 2017 didn’t continue this trend as a regional average, Africa’s growth rate over the last five years was nearly 30%, which well exceeds the global average estimated at 13.1%. African pig feed production was up over 6%. Dairy, layer and broiler feed production all showed increases this year also. In fact, Africa was the fastest growing region for dairy and broiler feed production. The downward trends were seen in beef and aquaculture.
Smaller countries such as Botswana, Uganda and Mozambique led the growth but the survey showed good growth for pigs, dairy, layer and broiler feeds in larger countries such as Algeria (with the obvious exception of pigs). Beef feed production decreases were reflected in countries such as Zambia and Morocco. While many African nations showed a small increase in aquaculture production feed production, the region as a whole was down primarily because of lower reported feed production in Egypt, which has now been surpassed by Nigeria.
On average, the region has the most expensive feed costs for pigs, layers and broilers.
5. Aqua treads water
Aquaculture feed growth was relatively flat, but this number can be deceiving. A growing global population, increased desire to consume fish because of reported health benefits and a need to produce farmed fish more sustainably and economically, should have resulted in strong growth but Asia feed production weighs disproportionately, representing nearly 70% of overall global fish feed production. Africa and North America were relatively flat but we saw strong growth in Europe, Latin America and the Middle East. The decrease in the Asia-Pacific region emanates primarily from China, where aquaculture feed production decreased 5%, significant for a country that is the leader in terms of aquaculture production and produces as much as five times more than the second strongest producer. Vietnam also reported a decrease of about 9%. Indonesia fell 17% as did Taiwan and Japan, each reporting drops of 9% and 3%, respectively.
These trends have been in progress over several years and reflect disease outbreaks, particularly in shrimp, and a growing consolidation of the industry into fewer larger and more sophisticated farms. Several smaller markets grew significantly including Brazil, Chile and Peru, and the Middle East, led by Iran. Africa could have grown also but the region’s leading country, Egypt, saw a drop in production.
6. Equine races ahead
The equine industry has seen a healthy growth in the last year with every region reporting growth. North America and Africa reported the least change at 1% and 2%, respectively, but regions such as Latin America and Asia Pacific both showed healthy growth of 108,000 metric tons and 160,000 metric tons respectively. Generally, this is the result of incremental growth in many countries in both of these regions including Peru, Brazil and Mexico in Latin America and South Korea, China and Australia in the Asia-Pacific region.
The Middle East reported a growth of 22% or about 25,000 metric tons. Much of the growth stemmed from the United Arab Emirates and Saudi Arabia. This region is difficult to obtain information from, and the horse industry is no different; this growth may be a result of better information as well as a clearer understanding of the industry. Europe saw the largest increase both by percentage (24%) and tonnage (396,000). Several countries contributed to this incrementally, such as The Netherlands, Ireland, France and Russia.
7. Feed costs reflect food costs
There was no general direction for the feed industry costs this year. They are as variable as any other industry sector has been in the last twelve months.
From a pig perspective, costs are about 2% higher globally, and a pig finisher diet is estimated to average around $363. Pig production is up about 5.54% and indicates good growth for this sector.
The layer industry has seen very little growth overall (less than 1%) and holds its feed finisher diet costs similarly with a decrease of less than 2% at about $363. Broiler production costs for finisher diets are down 14% globally at $418, while the industry itself is showing incremental growth of just under 3%.
Regionally, several countries in Asia-Pacific have held higher prices for animal feed production including Japan, Taiwan and Indonesia. Africa also has had some high record holders, particularly Cameroon and Nigeria.
In general, feed costs are low and, for the foreseeable future, will remain that way. This is because farmers and growers have gotten better at combatting disease and drought in plants. Corn, soy and wheat can all be produced at low costs and the harvests are bountiful. This lower input cost is reflected in our own food costs, which are also at an all-time low historically.
As usual, the Alltech Global Feed Survey has illuminated some intriguing points that can play a role in analyzing the economies of agribusiness and indeed of the world. To discover more data from the 2018 Alltech Global Feed Survey, including the results booklet, an interactive global map and a presentation of the results, please click here and fill out the form on this page for access.
Source - Alltech
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