AFIA President and CEO Constance Cullman discusses the main trends she believes will influence American animal feed producers in 2023
As we near the end of 2022, all sights are set on the new year. In preparation for the November/December issue’s cover story, “2023 Feed Industry Outlook: Brace for economic uncertainty,” Feed Strategy reached out to American Feed Industry Association (AFIA) President and CEO Constance Cullman to get her take on the hot topics influencing U.S. poultry and livestock feed production in 2023. Here is the full interview.
Feed Strategy: What are the three main issues animal feed industry stakeholders should/will have on their radar in 2023?
Constance Cullman, president & CEO, AFIA: There are three main issues.
- Supply chain
While we’ve made great gains over the past year in resolving supply chain issues at America’s ports, the U.S. animal food industry is continuing to navigate the global shift in grain and fertilizer supplies due to Russia’s invasion of Ukraine and higher energy costs, increasing pressure throughout the marketplace. We expect that these issues will only exacerbate market volatility going into 2023, leading to a continued game of whack-a-mole.
The American Feed Industry Association is working with agriculture partners in quickly identifying and raising pain points so that they can be considered in President Biden’s whole-of-government approach to resolving America’s supply chains. We also continue to implore the White House to come back to the negotiating table with key trading partners. As we’ve learned from the COVID-19 pandemic, a trade stoppage in one area can send ripple effects throughout the world, so we must diversify our ingredient sources and export markets now to keep our future supplies and customer base stable.
- Labor
Going hand in hand with addressing our supply chain challenges is tackling the growing labor crisis. Our members continue to tell us that finding qualified people to work in their manufacturing facilities is a problem, despite increased financial incentives. Adding to that is the looming threat that the trucking industry will need to hire, on average, 110,000 new drivers annually over the next decade to keep pace with economic growth and attrition.
We continue to urge legislators and the administration to move sensible policies forward that reduce the barriers to entry and make U.S. agriculture an attractive industry in which to work. For example, we recently supported a pilot program that would reduce the driving age from 21 to 18 for those operating commercial motor vehicles in interstate commerce. Commonsense policies like this ensure we are meeting future workers where they are and providing them an on-ramp to a long career in an industry responsible for feeding the world.
- Regulatory process
Our industry recognizes that we lag behind Brazil, Chile and several European countries in approving novel feed ingredients that will reduce enteric methane emissions from ruminants and optimize livestock’s nutrient uptake, but the tide is changing. After increased pressure from Capitol Hill and industry, the Food and Drug Administration is reviewing how it approaches these products and discussing with stakeholders the ways it can modernize its process to usher these safe, innovative products to market sooner. We are also seeing other agencies, such as the U.S. Department of Agriculture, take a heightened interest in being a catalyst for change, leveraging public-private partnerships that uncover barriers to entry for these climate solutions and incentivize and promote on-farm adoption.
Next year, I believe we will start seeing pen being put to paper to get some of these changes made in regulation. Our industry should be prepared to speak up about how these changes will improve their ability to research and develop new technologies.
Feed Strategy: What is the greatest challenge feed manufacturers/nutritionists will face in the next 12 months? How can they prepare?
Cullman: Rising inflation is hurting us all. Not only are Americans emptying their wallets to afford their weekly groceries, but the increasing costs of goods are unfortunately making it more expensive for us to manufacture animal food, driving up feed and pet food prices.
Constance Cullman | AFIAAs of August, the consumer price index for all food stood 11.4% higher year-over-year and that number is expected to continue increasing between 2.5% to 3.5% in 2023. Our members recently heard from economists who said that rising inflation, along with geopolitical tension in Europe and arid weather unripe for crop production, will compel farmers and ranchers to reduce their animal numbers because of unavailability and high cost of feed, which could lead to global protein reductions.
At the AFIA, we are supportive of policies that promote the long-term economic health of the animal agriculture sector and raise awareness of how market manipulation only serves to exacerbate costs for all.
Find out what issues feed industry stakeholders have on their radar in the next 12 months, read 2023 Feed Industry Outlook: Brace for economic uncertainty
Feed Strategy: What issue will impact the feed industry the most over the next decade?
Cullman: Increased calls from Wall Street, the government and consumers for environmental, social and governance (ESG) reporting are deafening and a clear sign that the next decade will be critical for companies competing in the global marketplace. Although there are currently real limitations with meeting ESG reporting requirements, claims and emissions targets without agreed-upon standards, reliable data and resources – a concern we have been sharing with federal policymakers along with allied organizations – we recognize that ESG also presents great opportunities for the animal food industry to share its sustainability story.
The AFIA encourages the feed industry to watch the standards coming from Europe and elsewhere, which is taking a strong regulatory approach, and be part of the conversation in the United States so that it can help shape what the future holds for this type of environmental reporting.
Feed Strategy: How will the growing emphasis on the sustainability of the feed supply chain by downstream customers shape the feed industry in 2023?
Cullman: The animal feed industry has an important role to play in communicating with farmers and ranchers, policymakers and stakeholders animal nutrition’s important role in the sustainability efforts of the food chain. Improving the nutrition we deliver to our livestock, poultry and pets each day improves animal health and welfare, reduces our impact on the environment and increases our efficiency, making more with less. We need to be engaged in the dialogue and active in policymaking to ensure our industry’s contributions are not only recognized and valued, but not left out of opportunities to further enhance these sustainability efforts.
To take a look back, read Cullman’s 2022 feed industry trends remarks.
