Animal Feed Ingredients - Beating the Odds
Compound animal feed has been the easiest access to market route for animal feed ingredient manufacturers. FEFAC has estimated that while 2010 has been positive overall for compound feed, 2011 might at best be stagnant if not negative. Two of the trends identified by FEFAC for 2010 are worth mulling over -
1. Partial recovery of per capita meat consumption in 2010 in EU 27 countries (1 Kg over 2009, but 3.5 Kg below 2008). This data was released mid 2011. The trend for 2011 is yet to be seen. In essence, if a double dip occurs, we might see meat consumption nose dive further.
2. Stalled demand for industrial pigfeed in 2010, although pig meat output increased by 2%. This means that productivity targets for commercial pig farming were raised in 2010, and we are probably on the path of increasing this further.
It is obvious that selling meat is going to get difficult, and the resultant cascade on the entire production chain. But will this include feed ingredient manufacturers?
This question is best answered with another question - Even though compound feed consumption fell, productivity of swine husbandry systems rose. What was this due to? How important were productivity enhancers like nutritional and sensory ingredients in bringing about this positive change?
Across the pond, things have not been very different either. Butterball LLC has decided to close down one of its plants by the end of this year citing higher feed costs as a major factor affecting profitability. In the meantime, CJ just announced a $323 million amino acid plant in Iowa to manufacture Lysine.
The overall picture points to a difficult time for everyone involved in animal husbandry, except for those with solutions to problems - Feed ingredient manufacturers.