2020 Alltech Global Survey

by Vaughn Entwistle, Managing Editor, International Aquafeed

 

On 27 January 2020, Alltech held its annual evaluation of compound feed production for 2020. The event, which was hosted at Alltech's Kentucky Headquarters, is the most complete of its kind, and draws upon data from more than 140 countries and approximately 30,000 feed mills.

The survey was hosted by Alltech President Dr Mark Lyons, who this year fronted a panel of industry leaders including Jack Bobo, CEO, Futurity, USA; Bianca Martins, General Manager, Alltech, Mexico; Matthew Smith, Vice President, Alltech, UK; and Brian Lawless, North American Species Manager, Alltech, USA. The group discussed the trends behind the data and their implications for the global market. Topics ranged from consumer demand to the adoption of new technology. The event was also broadcast in a public livestream, allowing people from all over the world to attend.

Volatility affects world markets

2019 was a volatile year and the event began with a discussion of global forces that have impacted the world's feed markets. Uppermost, was African Swine Fever (ASF), which had a devastating effect on China, which has most of the world's pigs. Not surprisingly, ASF caused a staggering drop-off in feed sales to China (around 11%).

Global data indicates feed production by species as: broilers 28 percent; pigs 24 percent; layers 14 percent; dairy 12 percent; beef 10 percent; other species six percent; aquaculture four percent; and pets two percent. Predominant growth came from the layer, broiler, aqua and pet feed sectors.

Megatrends

Currently, the world consumes more pork than poultry, but Food Futurist Jack Bobo predicts that a seismic shift in feed sales will soon take place as we hit a point at which poultry will overtake pork production. Part of this will be caused by the difficulty smaller pig farms (such as in China) will find in its efforts to restock after ASF.

Meanwhile geopolitical tensions in the Middle East and the ongoing trade war between the USA and China are further disrupting factors. However, difficulties in one region/food group can cause opportunities for others. This could lead to countries such as Latin America becoming big winners.

But while pork has serious problems, other areas such as poultry, aquafeed and pet feed continue to grow.

Future concerns

The four major focuses for the future of the feed industry continue to be; environment, sustainability, regulation, and greenhouse gases (GHG).

As Doctor Lyons pointed out, we are now a globalised, connected market.

Environment: Governments may choose to concentrate on environmental concerns rather than market concerns

Sustainability: This needs to be encouraged at the global level, not just a local level. We are now watching to see how the coronavirus impacts global feed supplies/costs?

Biosecurity: Security is a major concern going forward. If we are going to continue to grow, we need to look back and study outbreaks so we can understand how to deal with future incidents. For better security we need to create a robust industry

Consumerism: Most of the world now operates in a consumer-driven marketplace. The lowest price is no longer the primary determining factor in food purchases. Consumers are more educated than ever and demand food that is sustainably and ethically grown with traceability throughout the food production chain.

The AgTech Revolution

While climate change and water shortages remain serious problems, the rise of AgTech is helping to cope with such changes and increase productivity while lowering costs. Innovations such as the use of robots and drones are driving costs down and reducing environmental impacts while increasing yield.

Last year the percentage of money spent on food in the largest countries went down. Farmers and producers have become more efficient, producing more food at a lower cost. The takeaway message is that producers need to embrace change and be a part of it.

Emissions and waste have gone down because of modern agriculture practices. Efficient producers have the lowest environmental footprint. Companies such as Maple Leaf in Canada say they will be carbon neutral by 2025. Farmers are producing more with less. Ireland is taking a leaf out of New Zealand's book in its goal of achieving net zero emissions within 15 years.

Social changes are directly influencing consumer demands

The United Nations forecasts that the world's population will increase from 7.2 billion today to 8.1 billion in 2025, with most growth taking place in developing countries and more than half in Africa. But another statistic also needs to be factored in. The populations of many countries are not only growing in numbers, they are also becoming more affluent (a good example is the Philippines). These more affluent consumers not only require food, they demand high quality food and high-quality protein. Forecasts predict that today's trillion-dollar protein industry will grow to two trillion dollars by 2050.

Alternative proteins

Many new eating trends have developed over the last decade. Vegetarianism and veganism is increasing in popularity with flexitarian, keto, paleo and other lifestyles that have led to the demand for alternative proteins. While this is having an impact, it is still a minority player. For example, one in three purchases in the UK are for milk alternatives such as soy, almond, rice, hemp, almond, coconut and so on. Despite this, all these milk alternatives combined account for less than one percent of milk produced in Europe.

Food providence

An informed public doesn't just care about price of their food, they also want to know where that food is produced and that it has been produced in a safe manner.

Worldwide, European consumers tend to lead these conversations. That said, the effects might be less than one might think. A good example is the recent craze for milk alternatives. One in three purchases in the UK are milk alternatives. But despite that, all milk alternatives combined still account for less than one percent of milk produced in Europe. The growing epidemic of obesity and type 2 diabetes is now a global issue.

While many new diets are gaining favour, the problem of obesity could be ameliorated by reducing the serving sizes of food and beverages. Just producing a smaller serving size for soda would have a huge impact on the number of calories consumed in a day.

Planet of Plenty

Futurist Jack Bobo had some encouraging final words that echo the Alltech vision of a 'Planet of Plenty': The rate of population growth will slow down after 2050. This makes the next thirty years the most important years in the history of agriculture. But the public won't let producers use the newest technology unless they trust the industry. There's never been a better time for the industry to allow science to show us the way.