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by Vaughn Entwistle, Managing Editor, Milling and Grain
n 27 January 2020, Alltech held its annual evaluation of compound feed production for 2020. The event, which was hosted at Alltech’s Kentucky Headquarters, is the most complete of its kind, and draws upon data from more than 140 countries and approximately 30,000 feed mills. The survey was hosted by Alltech President Dr Mark Lyons, who this year fronted a panel of industry leaders including Jack Bobo, CEO, Futurity, USA; Bianca Martins, General Manager, Alltech, Mexico; Matthew Smith, Vice President, Alltech, UK; and Brian Lawless, North American Species Manager, Alltech, USA. The group discussed the trends behind the data and their implications for the global market. Topics ranged from consumer demand to the adoption of new technology. The event was also broadcast in a public livestream, allowing people from all over the world to attend.
Volatility affects world markets
2019 was a volatile year and the event began with a discussion of global forces that have impacted the world’s feed markets. Uppermost, was African Swine Fever (ASF), which had a devastating effect on China, which has most of the world’s pigs. Not surprisingly, ASF caused a staggering drop-off in feed sales to China (around 11%). China’s problems are particularly difficult to address, given the diffuse nature of its production base, where 98 percent of farmers own fifty or fewer pigs. China’s problems have had a knock-on effect for much of the region as the whole South-East Asian corridor is massively influenced by China, 66 | February 2020 - Milling and Grain
which will continue to dominate far into the future. Global data indicates feed production by species as: broilers 28%; pigs 24%; layers 14%; dairy 12%; beef 10%; other species 6%; aquaculture four percent; and pets two percent. Predominant growth came from the layer, broiler, aqua and pet feed sectors.
Megatrends
Currently, the world consumes more pork than poultry, but Food Futurist Jack Bobo predicts that a seismic shift in feed sales will soon take place as we hit a point at which poultry will overtake pork production. Part of this will be caused by the difficulty smaller pig farms (such as in China) will find in its efforts to restock after ASF. Meanwhile geopolitical tensions in the Middle East and the ongoing trade war between the USA and China are further disrupting factors. However, difficulties in one region/food group can cause opportunities for others. This could lead to countries such as Latin America becoming big winners. Colombia has never been a pork exporter, but the country recently shipped its first container of pork to China, and countries such as Mexico are also learning how to export. But while pork has serious problems, other areas such as poultry, aquafeed and pet feed continue to grow.
Future concerns
The four major focuses for the future of the feed industry continue to be; environment, sustainability, regulation, and greenhouse gases (GHG). As Doctor Lyons pointed out, we are now a globalised, connected market.