Insights from Alltech’s Global Feed Survey

Eight countries, China, U.S., Brazil, Russia, India, Mexico, Spain and Turkey, produce 55% of the world’s feed and have 59% of the world’s feed mills. ( Lori Hays )

Global feed production is at an all-time high. In the 2019 Global Feed Survey, Alltech estimates a strong 3% growth to 1.068 billion metric tons of feed produced. This is the third consecutive year the survey exceeded the billion-ton production mark.

The feed industry has seen 14.6% growth over the past five years, says Dr. Mark Lyons, during the media webinar Tuesday. As the population grows, so does the middle class, which is well reflected in an increase in overall protein consumption.

Eight countries, China, U.S., Brazil, Russia, India, Mexico, Spain and Turkey, produce 55% of the world’s feed and have 59% of the world’s feed mills.

Here’s a brief look at the top trends from the survey:

China Remains Top Feed Producer and User

The world’s largest producer and consumer of feed has faced clear challenges in its pig herd with African swine fever (ASF) and foot-and-mouth disease in cattle. But overall, this year the country saw only a small decline of 0.4% in animal feed production.

China maintained status as the top feed-producing country in the world with 187.89 million metric tons, 10 million metric tons more than the U.S. More than 42% of the country’s feed production goes to pigs. ASF has only further accelerated China’s move toward larger, more professional farms and improved cost-efficient pork production. While feed production growth might not be as high this year as one might expect, the feed-cost ratio has improved dramatically.

The survey only showed a small portion of the ASF’s effect on feed use and demand. Lyons said some industry estimates are predicting a loss of up to 30% of China’s hog production in 2019 and 2020.

“That’s something for us to think about. Even if as that pork is removed from the market, we recognize that exports can only represent a certain percentage of the picture. The Chinese market is so dominant and so large, there’s few countries can export enough pork to make up that gap,” he said.

China’s dairy and beef feed production also both declined by 17%. China’s dairy industry is struggling as dairy 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.

Regional changes:

  • North America, 2% growth

  • Latin America, 1% Growth

  • Europe, 4% Growth

  • Africa, 5% Growth

  • Middle East, 2% Growth

  • Asia Pacific, 3% Growth

 

global supply
Global feed production;  Source: 2019 Alltech Global Feed Survey

 

Pig Industry Is A Story in Efficiency

Globally, pig feed production increased by nearly 1% in 2018. The only region that saw a decline in pig feed production was the Asia-Pacific region, including Mongolia, Vietnam, China, New Zealand and Japan. In addition to disease challenges, Lyons pointed to efforts in those areas to create a more professional and cost-effective production systems. From a tonnage standpoint, Europe saw the largest growth at approximately 2.2 million metric tons. Russia and Spain accounted for the majority, while Finland, Denmark, France and Poland also contributed. Latin America saw the greatest growth in pig feed, at 5% growth, thanks to increases in Mexico and Argentina.

Beef Production Led by U.S. and Canada

North America continues to lead feed production for the beef market, with an increase of 3% in 2018. Europe saw a slight decline at less than 1% and remained in second place. Latin America saw strong growth of approximately 8%, with Mexico and Argentina as the primary contributors. As a result, the Latin American region has taken third place in beef feed production, moving ahead of the Asia-Pacific region. China and Australia both saw growth in the Asia-Pacific region but could not offset the overall decline in countries such as Bangladesh, Mongolia, Indonesia, Taiwan, Vietnam and Pakistan.

“Beef in China has had a rocky road over the last few years,” Lyons said. “But there are new reasons for optimism, as people are moving away from quantity towards quality, they are often saying they would prefer beef over meat sources.”

Dairy Production On the Rise

Global dairy feed production saw growth in North American, Europe and Africa, while Latin America remained flat. Europe, a global leader in dairy production, grew on average by approximately 4%. The largest increase was in Turkey with 10%, while Ireland, Russia and the U.K. also contributed to the region’s growth. Africa’s growth was primarily due to a significant increase in both Morocco and Nigeria.

Poultry Levels Positive

Major growth areas for the layer feed included Europe, Latin America and Asia-Pacific. In Europe, Poland and Uzbekistan each saw growth of around 200,000 metric tons. Latin America had increases in Colombia, Peru, Brazil and Mexico. In the Asia-Pacific region, South Korea, India and Indonesia all saw growth of several hundred metric tons. North America experienced overall growth of 2%, in which both the U.S. and Canada saw increased production. Africa saw a small decrease in layer production due to declines in both Egypt and Seychelles.

Globally, broiler production increased by approximately 3% in 2018. There was growth in all regions, except for Latin America, in which a very small decline was observed. Africa showed 9% growth, demonstrating an overall trend that as populations grow and become wealthier, interest in protein does as well.

Aquaculture Treads Water

Overall, aquaculture feeds showed growth of 4% over last year. This was primarily attributed to strong increases in the Asia-Pacific and European regions. The traditional Asia-Pacific leaders in aquaculture, Vietnam, India and Indonesia, combined for an additional 1.58 million metric tons of feed in the region. China, the region’s leader, also saw an increase of 1% over last year. The primary European leaders either experienced strong growth or remained relatively flat. Those that did grow included Norway and Turkey, both at 7%, and Spain at a substantial 31%. The other regions remained relatively flat or saw only a 1% increase or decrease in feed production, demonstrating the continuity of the industry as a whole.


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