INTERVIEW: Young Animal Nutrition (Part 1) – Evolution During 2020

20 October 2020 - During the crux of the COVID-19 pandemic global lockdowns had a severe impact notably on food service channels, where consumption of some meats declined sharply and prices dropped. In some countries, COVID-19 related interruptions in the meat processing industry generated slaughter capacity issues, which in turn led producers and integrators to slow down their production.

The COVID-19 pandemic was widely reported on by the media in terms of its impact on the global livestock and poultry industry, but less so on the impacts on the early cycle of animal production: young broiler chicks, piglets and calves, and on the suppliers of that particular market segment.

[Erik Visser, Hamlet Protein] In many regions pork prices increased, leading to increased demand for growth enhancing feed specialties that improve piglet survival. This can be seen in China, where ASF has put pressure on the local meat supply. In the US, the opposite has been happening, as we see a reduction of piglets in the market due to less farrowing and stricter culling protocols. Housing of market hogs leads to a reduction in barn space. If current market conditions prevail, this will also influence piglet feeding.

Restrictions on the use of antibiotics are still in force in many markets and this is especially important when feeding young chicks. The relationship between nutrition and health has not changed in recent months, nor has the cost focus of poultry producers. With the onset of the pandemic, some companies have had to re-evaluate their production methods by hatching and placing less chicks for grow outs than before and targeting lower market weights or shorter grow out periods. While production has not fully recovered, more recently there has been increases in demand leading to increases in hatch and placement amounts.

We have seen a reduction in beef consumption due to Covid-19, as consumers have moved to less expensive meat sources; tourism has reduced significantly and food services in general have not been operating at normal levels. The need for dairy products has not changed and consequently the demand coming from high producing replacement heifers continues to be at the same levels.

[Ad van Wesel, ForFarmers] The veal/rosé market in particular was strongly impacted by Covid-19, as veal consumption strongly depends on the out-of-home market which was locked down abruptly in March last. When looking at rearing for dairy we already experienced a trend in the Netherlands to reduce the number of young stock/dairy cows due to the phosphate legislation for instance and the general economic situation of farmers. On the other hand, calves require more intensive feeding schemes (more CMR/compound feed per calf) to reduce the first age of calving and for “metabolic programming” reasons. A specific effect of Covid-19 and the consequential lower farm-gate milk prices was that in some countries farmers increasingly tended to feed calves with cow milk in order to save costs.

The swine market continues to be more influenced by the Chinese market dynamics than by COVID-19. The poultry sector was impacted because of the lock-down of the out-of-home market. Although consumers bought more poultry products from retail stores, this did not close the gap of the lack of the out-of-home channel.

[Elke van Gelderen, Cargill Animal Nutrition] Certainly young animal programmes across species underwent increasing scrutiny during the early stages of the pandemic, but we are seeing differences at a regional level where the impact is variable. For example, in broilers pressure on profitability has increased by changes in meat and egg prices putting pressure on feed cost reduction but also on the use of pre-starters to see how these can help to improve overall profitability. In countries like Spain and Brazil, the interaction between export opportunities, ASF and local COVID-19 impact is benefiting swine producers.

[Delphine Van Zele, Agrifirm EMEA] In general there was an impact on the livestock industry as – due to lockdowns and logistic problems – there was a disruption in meat consumption. This created a lot of pressure on the prices. Next to that, avian influenza and ASF are causing extra pressure on the market regarding export. Another challenge we noticed was giving support towards our customers in a way that was never done before: digital. Instead of being on the farm and walking through the stables to give advice on management topics, our people made the switch and give support via virtual stable tours.

[Feedinfo] Young animal nutrition is key to a healthy start and determines the productivity of the animal. But in your opinion was this ever neglected in any way in the past six months? Did producers reduce young animal diet costs?

[Erik Visser, Hamlet Protein] In general, we do not see a reduced interest in investing in young animal nutrition. Restrictions on use of antibiotics and ZnO are being enforced in an increasing number of countries and the need for safe and clean production remains relevant. High quality young animal feed remains as important as ever to achieve the overall productivity goals. Most nutritionists believe that young animal nutrition should never be compromised. Profitability greatly depends on feed costs, but nursery diets comprise a smaller percentage of overall feed costs. Lower quality nursery diets resulting in reduced performance may outweigh cost savings. Integrators have changed dietary composition to incorporate more ingredients that are inexpensive as a way to reduce diet costs; however, the importance of feeding the animals to meet their greatest potential and promote a healthy start has not been neglected. In most circumstances, it is a proper balance of reducing diet costs while still ensuring the nutrient composition of the diet will meet the requirements of the animal.

[Delphine Van Zele, Agrifirm EMEA] Not voluntarily, but the volatility in the raw material prices in combination with the logistic issues in Q1/2 sometimes forced feed producers to adaptions based on limited availability of certain ingredients. On the other hand, from the farmer’s point of view, these minor price effects didn’t have an impact on the use of young animal feed as the cost per animal isn’t that big compared to feed used in a later stage of the animal’s lifecycle. We see that there is more and more awareness in the market that it’s essential to start as early as possible to feed the animals. For sure, feeding is an important pillar for young animals, but let us not forget that management is as crucial as feed to grow up the animals. We sometimes forget the basics.

[Elke van Gelderen, Cargill Animal Nutrition] We wouldn’t say it was neglected in the past six months, but there may have been other factors at play. For instance, in the calf sector, limited travel reduced visits to farms from specialists to troubleshoot on-farm nutrition, health, and management issues which resulted in some problems going unsolved or taking longer to resolve. In countries where milk prices declined due to reduced demand, the amount of milk available on the farm to feed calves increased. Consequently, farmers tended to feed more milk and feed milk for longer time than they would otherwise. There was pressure on reducing costs in all feeds, but again this played out geographically and in the case of broilers for example, more at the grower and finisher feeds. When considering young pigs, the interaction between COVID-19 and ASF had very different effect among countries. In some cases, prices went up when there was strong export demand or if the population had been reduced by ASF, and in this case we often see a high interest for further increasing young pig performance and health.

[Jaco Eissen, Trouw Nutrition] In the first few weeks of the pandemic, broiler producers in countries with a drop of demand for poultry meat, started to slow down the growth of the broilers. Nowadays, with the numbers of broilers adjusted to the lower demand, the focus is again largely on minimizing cost per kg of meat, and producers know that cost saving in young chick diets is not a good strategy to achieve that objective. For beef, there is less impact of diet costs in the younger animals (as any existing interventions are already relatively low cost). The greatest impact of diet evolution has been within intensive growing/finishing systems. Dairy farmers might have made some changes to the feed in order to cope with the circumstances, but no significant changes have been made in rearing strategies, as the overall goal of improved future productivity has not changed. Lastly, swine producers also realize that a good life start is critical for lifetime performance and the investment in early life is only a very limited part of the total production costs. And ASF has ruled this game again as well: where market prices were favourable, customers were very open to fully harvest the benefits of an optimized start.

[Ad van Wesel, ForFarmers] Yes, in H1 2020 sometimes farmers fed their calves cow milk to save costs. But the overall trend in calf rearing is more intensive feeding schemes. The economics in reduce first age of calving, and metabolic programming is dominating over young animal feed costs. Concerning piglets, farmers always strive to rear piglets in a healthy and effective way. For pig farmers prices did not drop under the point that farmers were compromising in diet choice. In broilers the young animal feeds are mainly used to have more effective birds later on. This concept is always cost effective even in periods of lower prices. Farmers using high quality broiler pre-starters will generally not stop doing that.

[Feedinfo] How has demand for young animal nutrition products evolved in 2020?

[Elke van Gelderen, Cargill Animal Nutrition] Demand has been variable by species, but generally soft. Consistent with milk price declines, demand for calf milk replacers and calf starters have been lower in the past few months, though that is gradually changing for the better. For broilers, demand has stayed pretty steady and we are even seeing more interest in how pre-starter can help improve performance and health in birds. For swine, globally speaking, the demand was mainly reduced due to ASF, but also from local and short-term impacts of COVID-19. As herds in Asia are re-building and COVID-19 safety measures are put in place, we see the demand for young animal nutrition products increasing again.

[Jaco Eissen, Trouw Nutrition] For all species, this greatly varies depending on the region. But for instance and as a generalization we have seen a small reduction of calf milk replacer volumes due to lower number of bull calves and small number of female calves fed with fresh milk.

[Delphine Van Zele, Agrifirm EMEA] Although the market was and is still facing tough moments, the demand for young animal nutrition never stopped. Worldwide, the poultry industry is growing and thus the need for young animal nutrition as well. This being said, there are also other challenges than the Covid-19 pandemic that pushes the producers to look forward. For example the withdrawal on the use of therapeutic zinc oxide in weaning diets for piglets. The regulation is there, so the market needs to be ready without increasing the use of antibiotics. This is a demand we saw also changing during 2020. More and more producers are looking for alternatives for zinc oxide as well as for antibiotics.

[Ad van Wesel, ForFarmers] When looking at the first half year of 2020 we saw that the demand for young animal feed calf rearing in total was quite stable; there were fewer calves, but feeding schemes were more intense. In some countries farmers are keen to save costs by feeding their calves cow milk instead of milk powder. Piglet feed volume increased slightly. And as stated in our half year report – broiler farmers were slow in filling their barns given the price drop for broilers.

[Erik Visser, Hamlet Protein] We have seen an increasing awareness on the importance of young animal nutrition in recent years. This is driven by the desire to reduce medication (ZnO, antibiotics) and new insights on the impact of early nutrition on gut integrity and performance at an older age. Next to that we are noticing an increased interest to reduce (or eliminate) the inclusion of animal proteins (blood plasma, haemoglobins, fishmeal) in feed. In 2020, in general terms we see an increase in China; mixed picture in Asia; decrease in North and Central America and stable levels in EMEA. ASF has had a strong impact on Asian swine markets and recent outbreaks in Germany might lead to a redistribution of global volumes.