The global animal feed market is undergoing marked changes which should accelerate this decade. The pattern of global consumption is shifting towards a greater share of animal products in diets. Thus, larger quantities of crops will be used as animal feed.
Maize (maize) and protein meal (oilseed extractions) will remain the most important food products and will constitute 60 percent of total animal feed use by 2030, according to the OECD-FAO. Maize feed demand is forecast to increase by 1.4 percent per year, slightly faster than the forecast growth of 1.2 percent for protein meals.
Importantly, global meat consumption is shifting to poultry, mainly reflecting lower poultry prices in low-income developing countries where demand is price elastic. As incomes recover, demand will also recover. By 2030, poultry meat will account for 41% of all protein from meat sources, as consumers are drawn to lower prices, product consistency, and higher protein / lower fat content.
There will however be challenges, such as epidemics, sanitary restrictions and trade policies that will affect the development and dynamics of the global meat market. Poultry succeeds in meeting these challenges simply because poultry can react faster to market signals due to a shorter production cycle compared to ruminants.
Poultry lend themselves to faster improvements in genetics, animal health and feeding practices. As poultry grows, greenhouse gas emissions will slow. In fact, in the United States, young cattle receive a “toilet training” in facilities called “Moo-Loo” in order to limit the spread of greenhouse gases.
These trends will certainly find an echo in India, the world’s largest producer of milk and third-largest producer of eggs. The five-year average annual growth rate of livestock, dairy and fisheries to 2020 was 8.6%. According to the Livestock Census 2020, the total dairy cattle population increased 10.5% to 74.6 million in 2019.
Production on the rise
Projections show that by 2022-2023, milk production will increase to 235 million tonnes (up from 198 tonnes in 2019-20) and egg production to 136 billion (up from 114 billion in 2019-20). Thus, a strong growth in milk production combined with food intensification will lead to a growth in feed demand of 2.4% in the next 10 years. At the same time, demand for protein meals is expected to increase by 3% per year in the next 10 years as India moves towards animal production based on compound feed.
It is in this context that the industry must examine and develop a sustainable animal feed market. But such a market will have to be part of a “sustainable animal agriculture ecosystem”. The industry has inherited a legacy ecosystem that does not recognize sustainability and must evolve to cope with impending changes. To this end, a review of technologies, services, standards and regulations is required.
For feed manufacturers, there are challenges in sourcing raw materials for animal feed, including land constraint, water scarcity, climate change, low crop yields, lack of technological infusion and, but not least, political constraint. These must be overcome.
Stakeholders in animal agriculture are facing challenges. The uncertainty of raw material / feed availability, volatility of feed prices, fluctuating demand, the political environment and the gradual inroads made by plant proteins are some of the issues facing l industry will have to tackle.
Of course, there are solutions that the industry must be prepared to adopt. To ensure the availability and access to the raw material, contract farming is the way to go. Establishing upstream links, in particular with POs (farmers ‘and producers’ organizations), will ensure price stability and guaranteed access with economies of scale.
Food price volatility often hurts manufacturers’ bottom lines. Hedging in commodity exchanges through derivatives is a proven method of price risk management. Futures contracts based on delivery can be explored.
While a pervasive protein deficiency in India is sure to increase protein consumption as incomes rise, perhaps the biggest challenge for animal protein will come from the emerging segment of plant protein. Industry needs to recognize that animal protein – whether it’s milk, meat, poultry or eggs – is much more expensive than vegetable protein, as the author’s research shows on cost. comparison of proteins. So the big question is whether animal protein can compete with the cost of plant protein, especially in a price sensitive country like ours.
Finally, the animal agriculture-based industry should be clear on where it wants to be over the next 10 years.
Research is therefore a priority to study the market and propose projections of demand, a strategy to ensure higher yields per dairy animal, means of promoting animal health and nutrition, an estimate of the number of layers and chickens. necessary meat, feed demand, as well as vaccines. requirement. Upgrading skills to keep up with global trends, building adequate processing capacity and investing deserve special attention as the industry has the potential to attract foreign direct investment.
Excerpts from speeches delivered at the recent CLFMA of India National Symposium in Hyderabad. The author is a political commentator and an agribusiness specialist. Views are personal