23 August 2022 - The Feedinfo Leaders’ Network gathered recently to discuss the key issues impacting the animal nutrition supply chain ahead of the Feedinfo Summit taking place next month in Barcelona (26-27 September).
The issues will be discussed at length on stage and likely also during networking sessions. However, in the run-up to the event, we thought it would be useful to share with you some of the main talking points raised and flag senior executive expectations for the Summit. We spoke to Simon Heath, who is Chief Commercial Officer at AB Agri, and a member of the Feedinfo Leaders’ Network.
The discussion below between Simon Heath and Feedinfo editor-in-chief Simon Duke has been edited and condensed.
[Simon Duke] In the Feedinfo Leaders’ Network meetings, the group discusses the big-picture, long-term issues impacting the sector. However, after our initial meeting in early-February, we were far from imagining that a war in Ukraine was about to break out, disrupting dynamics in an already challenging market. Inevitably the focus since has been on high raw material costs and rising prices for all. What has the experience been like at AB Agri?
[Simon Heath] Over the past few years, our business has reacted and adapted at pace to the unforeseen challenge of COVID-19, which is still impacting several of our businesses; African swine fever and bird flu to name a couple of disease challenges, plus our UK operations have had to manage the transition brought about by Brexit. Our teams have worked tirelessly across our business units to ensure that we deliver the best solutions for our customers and have adapted to evolving and changeable situations in the 85 countries that we operate.
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Across AB Agri, we have seen commodity prices and more specialised ingredient costs reach levels that we had never seen before, and we cannot with any certainty make any predictions for the future. Raw material costs, energy price rises, and inflationary pressures are impacting all our businesses. The collaborative relationships that we have with our customers, and our deep understanding of their needs, means we have been able to continue to provide solutions to help them achieve their goals despite the currently volatile market conditions. All in all, I think the past 2-3 years have thrown up the most challenges, both in number and complexity, I have ever experienced in my 30-plus years in this industry. |
Simon Heath[Simon Duke] The Feedinfo Leaders’ Network believes that due to increases in energy, transport, and feed costs, farmers should be getting a fairer price for animal protein to ensure the sector remains viable. How can the costs be further passed onto consumers? What needs to be done now to educate people on the extra costs the sector faces, not only associated in this context of inflation, but also the extra costs that can come with sustainable practices?
[Simon Heath] The pressures that consumers are facing around everyday living costs are well reported in the media. The conflict in Ukraine has brought about challenges to global food security and the international supply chain. I don’t believe there is a country that isn’t experiencing some difficulty as a result of this situation. In many markets, weekly shopping bills are increasing across multiple food categories, including meat, eggs and dairy products, but communicating the inflationary pressures that farmers are facing is a difficult message to land with consumers right now. From feed companies to processors, food manufacturers and supermarket chains, we must all come together with a united voice to promote the benefits of eating animal proteins, the quality, and the nutritional value that they provide.
Now more than ever we need the public to support farmers. It is well documented that we are facing a global protein challenge in the years ahead, based on global population predictions. We must build upon and develop our industry to help address this challenge, but we must do this sustainably to help preserve our planet. We need to ensure that shoppers have access to accurate information about animal production to avoid misinformation. This will help the public to make informed choices about the products that they place in their shopping baskets.
[Simon Duke] Higher costs are of course not the only challenge. In its meetings, the Feedinfo Leaders’ Network has discussed animal diseases, digitalisation, societal pressures on animal agriculture among other topics. In terms of the discussions that you are currently having with the industry, are these other challenges still equally important or do you have a feeling that they are being put aside for the time being?
[Simon Heath] Despite the current uncertainty and economic challenges, it is encouraging to see that there remains significant progress and investment in the future of the animal agriculture industry. Advances in digital technology, innovation, and solutions to enable the highest standards of animal health and performance, remain key trends and are frequently reported in the media. Mergers and acquisitions, strategic partnerships and significant investment to develop our industry appear to be maintaining momentum. And as AB Agri has previously mentioned in this publication, we are looking for further acquisition and partnership opportunities, and we will also continue to invest significant amounts of money in developing new technologies.
Whilst it is difficult to predict exactly how our industry will change in the next 5-10 years, I am very sure that it will evolve for the better. If businesses, including AB Agri, continue to invest, innovate, and look for new opportunities then I am sure that we can play an important role in supporting both our farmers and feeding millions of people around the world.
[Simon Duke] What kind of advice/experience are you looking for at the Feedinfo Summit in Barcelona?
[Simon Heath] Everyone attending the event is in a privileged position. We all have a responsibility to develop the future of the animal nutrition and farming industry and ensure that it is sustainable and responsible for generations to come. With a wealth of experience attending the event, from all across the supply chain and from countries all across the globe, I am hoping that a sharing of knowledge will provoke some new thinking that I can bring back to AB Agri.
I’m pleased that there is a significant focus on the topic of sustainability, and I am hoping for some good debate here. I’m also interested to understand the views of the industry with regard to the big challenges that others are facing now and expect to face in the future. I foresee some lively round table conversations but hopefully some consensus as to how we make sure that our industry develops in a responsible way.
