Due to the continued increase in demand for animal protein and other animal-based products, global feed production remains a key player in the agricultural economy. In its 12th annual Global Feed Survey, which formed part of its 2023 Agri-Food Outlook report, Alltech once again shared how this vital industry changed in the past year and highlighted the trends that impacted growth.
In this Industry Perspectives, Alltech’s CEO and President, Dr Mark Lyons unpacks some of these trends for Feedinfo and gives us more detail on exactly how global feed production fared in 2022 according to its survey. This includes the leading causes of decreased production in Europe, the impact of animal diseases, and the correlation between nutritional and technological advancements and production challenges. We also touch on sustainability efforts and how they have impacted the industry.
And with Alltech’s annual ONE Conference going on the road for the first time with events in 12 countries around the globe, we also asked Dr Lyons to share what led to this decision and how this makes for a better conference for attendees.
[Feedinfo] Let’s kick off with how global feed production fared in 2022 compared to 2021. What were some of the key takeaways and surprises in this year’s report? What were some notable species results?
[Dr Mark Lyons] Global feed production remained steady in 2022 despite significant macroeconomic challenges that affected the entire supply chain. Europe bore the brunt of the impact, including significant disease challenges, severe weather and the impacts of the invasion of Ukraine. Alltech’s Agri-Food Outlook estimates that global feed tonnage totaled 1.266 billion metric tons (BMT) in 2022, a decrease of less than one-half of one percent from 2021’s estimates.
The annual survey, now in its 12th year, includes data from 142 countries and more than 28,000 feed mills. It assesses compound feed production and prices by utilizing information collected by Alltech’s global sales team and in partnership with local feed associations.
The Alltech Agri-Food Outlook also offers a holistic look at the state of the industry, using answers from our corresponding qualitative survey to uncover the trends and technologies that are impacting the agri-food industry, highlight opportunities for growth and gauge expectations for 2023.
Globally, increases in feed tonnage were reported in the aquaculture, broiler, layer and pet food sectors, while decreases were reported in the beef, dairy and pig sectors.
[Feedinfo] Who was behind this slight increase in production? Where in the world were you seeing these increases and what was powering them?
[Dr Mark Lyons] Feed production increased in several regions, including Latin America (1.6%), North America (0.88%) and Oceania (0.32%). As a result of improvements in the scale and accuracy of our sources in the Middle East, our 2022 feed production numbers were nearly 25% higher than they were in 2021.
Latin America had an increase of over 3 MMT, with most of this growth reported by Mexico, Brazil and Chile. North America (the U.S. and Canada) reported an increase of more than 2.4 MMT (all in the U.S.). Growth was reported in the broiler, beef and pet food sectors.
The region of Oceania was flat, with a small reduction reported by Australia that was offset by a slight increase in New Zealand.
Although it experienced a narrow reduction in feed production, China remains the largest feed-producing country in the world. Together, the top 10 countries consume 64% of the world’s feed, and half of the world’s global feed consumption is concentrated in four countries: China, the U.S., Brazil and India.
[Feedinfo] What were the biggest challenges affecting the agri-food sector in 2022, according to the report?
[Dr Mark Lyons] Inflation and the overall state of the economy — particularly the increased prices of raw materials, feed and food — have been the biggest challenges affecting the agri-food sector in 2022. The state of the economy will remain one of the biggest factors influencing the success of the industry. Changes in consumer habits such as point of purchase and dietary trends are also making an impact.
Supply chain disruptions remain an obstacle for the agrifood industry across all regions.
Many regions reported that geopolitical tensions —particularly the invasion of Ukraine — have affected imports and exports, the supply chain and raw materials prices. The direct impact of the war was reported in Moldova and in Ukraine, where feed production fell by over 35%. The invasion of Ukraine also indirectly affected feed production throughout the rest of the world.
[Feedinfo] Europe saw the biggest drop in production at 4.67%. The report mentions bird flu, ASF and the war in Ukraine as reasons. But what was the leading cause here? Can you break down this number for us.
[Dr Mark Lyons] In Europe, the leading cause was ASF, responsible for as much as 65% of the drop there. Secondarily, the war in Ukraine, which was responsible for approximately 16% of the drop.
In Europe, ASF was limited to Eastern Europe. Many countries stated their agriculture sectors were affected by one or more animal diseases. However, disease presence did not necessarily have a proportionate impact on the feed tonnage figures. In some cases, sectors saw growth despite the presence of disease(s).
[Feedinfo] Of course, European production wasn’t the only one impacted by animal diseases. According to the report, where else did you see animal diseases significantly impacting production?
[Dr Mark Lyons] Animal diseases have disrupted feed production in more than 80% of countries. Avian influenza affected all regions’ feed production in 2022. In Africa, this disease manifested most significantly in Egypt, Morocco and South Africa. In Asia, nearly all countries were affected. In Europe, the affected countries included Belgium, Bosnia and Herzegovina, Bulgaria, France, Ireland, Moldova, the Netherlands, Poland, Russia, Serbia, Turkey, the U.K. and Ukraine.
In Europe, African swine fever (ASF) has most significantly affected Ireland and countries in the East. In the Americas, the Dominican Republic was affected most significantly. In Asia, ASF has played a significant role in China, Indonesia, Malaysia, Myanmar, Nepal, the Philippines, Singapore, South Korea, Thailand and Vietnam. In Africa, Kenya, Mozambique and Namibia were affected.
Foot and mouth disease (FMD) was an issue in Africa, particularly in Egypt, Mozambique, Namibia and South Africa. In Asia, Indonesia, Mongolia, South Korea and Thailand were affected. Finally, in the Americas, FMD was an issue in Bolivia.
Swine flu was an issue in Namibia, China, Myanmar, Belgium and the U.S.
Overall, Latin America and the Middle East did not report many instances of disruption due to animal diseases.
[Feedinfo] Looking at the top nutritional and technological opportunities that feed producers identified in the report, did you seeing a direct correlation to the production challenges they were facing in 2022?
[Dr Mark Lyons] A variety of technologies are providing growth opportunities for the agri-food industry. Among the technologies making the biggest impact are nutritional solutions, biosecurity and the automation of labor/robotics.
Of nutritional solutions, respondents noted enzymes (32%), technologies impacting rumen function (14%) and the management of mycotoxins (14%) as being the most significant to their market. The use of enzymes to improve the digestibility of nutrients, decrease the cost of production and reduce the environmental impact of agriculture are having a significant positive impact.
Innovative technologies that increase efficiency and improve sustainability are highly promising and important. Opportunities for growth include sustainable solutions for production costs, research and development for more durable and productive agricultural products to mitigate climate change, and new agricultural production technologies.
[Feedinfo] What about sustainability? Did sustainability efforts impact the feed solutions and technologies that feed producers are seeing as pertinent?
[Dr Mark Lyons] Efforts to improve environmental sustainability are impacting the feed/animal agriculture sector in most regions. The majority of respondents said sustainability efforts are being driven by the government (50% of respondents), food producers and processors (47.27%), consumers (44.74%) and retailers/ food service companies (39.47%).
The top sustainability measures being implemented include reducing antibiotic usage and antimicrobial resistance (AMR), improving animal welfare, producing food more efficiently, reducing water pollution, creating renewable energy, reducing greenhouse gas emissions, and enhancing nutritional value and food security.
Some of the biggest ag related opportunities are new technologies like smart-farm applications, increasing efficiency, incorporating more nutritional solutions and continuing to make efforts to become more sustainable.
[Feedinfo] Finally, let’s chat about your upcoming Alltech ONE Conference. Can you talk to us about your reasoning behind taking the event to 12 countries this year? How does this make for a better ONE?
[Dr Mark Lyons] As our customers and partners continue to face many challenges and uncertainties, we determined that 2023 would be dedicated to meeting them in their market. This special edition of the Alltech ONE World Tour (watch Dr Lyons' recent chat with Feedinfo about the event here) will endeavor to deliver global expertise to locally relevant issues. In the midst of economic and political uncertainties that fuel regionalization, this ONE reflects the responsibility we have as a global company to be a connector of people and ideas, ever advancing our purpose of Working Together for a Planet of Plenty.
While we look forward to bringing ONE home to Kentucky in 2024, the 2023 ONE World Tour is a unique opportunity to discuss the future of agriculture with stakeholders all over the world, offering both a global and local perspective for attendees. It will unite changemakers and thought leaders in unique forums to discuss the future, examining regional and local market trends in agriculture, business, health and nutrition.
For more information on the Alltech Agri-Food Outlook, visit www.alltech.com/agri-food-outlook and the Alltech ONE World Tour, visit one.alltech.com.
Published in association with Alltech