16 October 2020 - Leaders of the Feedinfo Summit 2021 network, during a Feedinfo-organised webinar yesterday which was attended by nearly 300 delegates, were quick to say that the animal nutrition industry has a bright future ahead. The sector is proving to be resilient during the COVID-19 pandemic and society on the whole is recognising more and more the essential part it plays in the food chain.
They acknowledged that it will remain challenging in th short-term but the industry has medium-term opportunities it will tap into. But be it Adriano Marcon (President, Cargill Animal Nutrition), Dick Hordijk (CEO, Royal Agrifirm) or Rob Koremans (CEO, Nutreco), they do fear that lingering effects of an economic recession will have impacts, not only on consumer spending and some animal protein consumption patterns, but also on the financial robustness of some of the meat and livestock sector’s most vulnerable players.
“We [as an industry] are strong and we manage to recover. Our core strength as an industry is incredible,” said Hordijk. “But I am worried about average incomes declining and the impact of that on the food chain. I am not sure but our smaller players in the industry may be more financially challenged. We need food chains to continue to work and we mustn’t assume that everyone is financially solid.”
“Customers and suppliers face challenging financial conditions. We need to help them,” added Koremans.
“Our concern is the economic growth slow down, unemployment and therefore reduction of discretionary income. This will lead to a reduction of animal protein consumption in the most affected places," went on to say Marcon.
Marcon, Koremans and Hordijk all argued that there is clearly a relationship between animal protein consumption and COVID, so it is up to the industry to follow trends and adapt.
Koremans said: “It will take time for consumption growth to start again in some areas of the world and we need to be there along the way. It will be a mistake to assume we will all be standing. If the recession lasts long, we may be in trouble.”
Marcon added: “In the medium term, animal protein consumption will continue to grow, especially driven by Asia and emerging markets. In addition to COVID-19, we mustn’t forget that the world is recovering from African swine fever. We are now collecting the benefits of this recovery.”
“I see predominant tailwinds due to the need to fill the protein gap in China and South East Asia. This is and will continue to impact the producer economics not only in Asia but also in the main exporting countries like the US, Brazil, Spain etc.” he added.
Hordijk also agreed that the pandemic developments will have an impact on the supply chains and there will inevitably be changes in the consumption patterns and most likely a reduction of the amount of animal proteins in the diet.
“But at the same time livestock farming is playing an important role in global food production,” he commented, “like changing products, which do not fit for human consumption, into human food … Livestock farming is playing an important role in global livelihood.”
COVID-19 and African swine fever has exposed some of the frailties of the supply chain and those need to be addressed next and collectively. What remains paramount for Koremans, Hordijk and Marcon is that the industry pulls together and reflects on how to further secure the supply chain, offset market disruptions and work in all kinds of scenarios in order to make them robust enough to take the hit of an eventual second, worse global pandemic.
Koremans said: “We strongly believe that the whole industry needs to come together to address the big issues of our industry, via pre-competitive development platforms for example. I think there are numerous ways to do this, such as partnerships, strategic round tables, etc. Only united and together we can continue to feed our people while not depleting our planet!”
For Marcon, biosecurity is key and has now become more front and centre than before. Finding different ways to interact with customers and developing digital engagement strategies are a must. He also said that the coming together and working in unison efforts must take place at all levels. Over the past months, he said, “we’ve been seeing more importance given to essential workers.”
“It is perhaps time to reshuffle values in society and that we appreciate more the important work done by these people.”
And Hordijk concluded that all this debate underlines the need to focus on sustainability and grow awareness of food and respect for people in the food chain. He also said that he believes digital communication has accelerated change and we as an industry are increasingly exploring new ideas.
“There is an urge for faster change, and bloody hell we are capable of doing this!” he argued.