Alltech President and CEO Dr. Mark Lyons shares his thoughts on the 2021 Global Feed Survey results and the mega trends influencing the world’s feed industry.
Alltech’s 2021 Global Feed Survey provides an in-depth look at the 2020 production volumes of the world’s top feed producing countries, species data and analysis of the macro trends driving the previous year’s tonnage gain and losses.
In this edition of Feed Strategy Chat, Alltech’s President and CEO Dr. Mark Lyons drops in to discuss the report’s highlights and the trends he feels may influence feed production now and for years to come.
Video transcript: Feed Strategy Chat with Dr. Mark Lyons, Alltech President and CEO
Jackie Roembke, editor, Feed Strategy: Hi, everyone. Welcome to Feed Strategy Chat. I’m your host, Jackie Roembke, editor of Feed Strategy magazine.
This edition of Feed Strategy Chat is brought to you by WATT Global Media and FeedStrategy.com. FeedStrategy.com is your source for the latest news and leading-edge analysis of the global animal feed industry.
Today we’re joined on Zoom by Dr. Mark Lyons, President and CEO of Alltech. Dr. Lyons is here to discuss his views on the outlook for global feed production this year. Hi, Mark, how are you?
Lyons: Great. Great to be here. Thank you for the opportunity.
Roembke: My pleasure. Well, let’s get right into it. Alltech recently released the results of its annual Global Feed Survey. Did any of the trends that it revealed surprise you and why?
Lyons: Yeah, I think that we weren’t necessarily surprised by them, but I think these are some of the surprises from 2020. We saw these things take place over the past 12 months and then we were able to see them reflected in the data, which is always something that is good to see.
I think the top story really was the resurgence of the Chinese feed industry. This is something, of course, where we really saw a reduction in total feed production before. And then I think, a much faster rebuilding of particularly the Chinese pork industry than was anticipated. And so China saw a 5% growth and reclaimed its position as the top feed producing country with 240 million metric tons. And so I think the speed at which this happened — the repopulation, the transformation really not just in terms of location of pig farming in China, but also the technology that’s being utilized — was really something that was a big, big story. I think they’ve been able to overcome ASF in large part due to those two movements: the change in location, also being impacted by environmental challenges, particularly related to water, and the AI in the agriculture sector, really moving away from from those more sensitive areas, and then also the technology.
I can think back to my time in China, where I spent six years, there was really a hybrid system, there’s still a lot of backyard farming, a lot of modernization going on. And now we can see really a transformation where we have some of the most high-tech production systems in the world.
I think another story there really was one that we probably also shouldn’t be too surprised by, which is there is 8% growth in pet food. And so we know that one of the big trends of COVID was pet adoption, in fact, as many of you know, people not being able to find pets, rescue animals, for example, to adopt. And so that was actually a global trend. I think that’s interesting that it isn’t something we’re just seeing in the U.S.
And also, you know, I think the rise of several other trends. As we’ve gone through our feed survey over the last few years, we start to ask for more comments. And we saw that people talked a lot about trust. They talked about the focus on health and people looking to their food for health benefits. I think it’s something we can see as an opportunity for the future.
The big trend of sustainability continuing and inclusion in business being something that is a trend that we need to all keep an eye on.
The top 10 countries produced almost two-thirds of the total feed, and Latin America saw 4% growth in Asia, about 2% growth. And we did also see sectors such as agriculture, continuing to have strong growth at about 3% slower than we saw in previous years.
Alltech: Global animal feed production up 1% in 2020: https://bit.ly/3oRuzaE
Roembke: And, in your opinion, what opportunities and challenges do you think feed producers will face in the next 12 months?
Lyons: Yeah, I think that’s an excellent question. It’s exactly what we need to be thinking about. One of the things that I’ve challenged our team with a little bit over the last while. It seems like we’re almost busier now than we were before, but trying to carve out a little bit of time to reflect on things like that: What are the things we’re going to see? How do we anticipate them, and what’s going to be the impact? I think one thing we’ve been talking a lot about internally is that businesses actually have an extraordinary opportunity right now to play a bigger role in society. People are looking for leadership, particularly locally, you know, and they want those people who are relevant. We’re obviously all traveling less and living much closer to home. And so I think that’s an opportunity for all businesses.
And I think that’s something we would suggest to people: Think about the positive impacts you can have in your society, particularly, as we get through COVID, and come out the other side of this.
The other big trends, you know, that we’re really seeing that I think can be a challenge or seen as a challenge, but truly is an opportunity is sustainability. You know, this is really something that we’re starting to see in a much broader way. Over in Europe, we’re watching what’s taking place with the Green Deal. And we’re really pushing our teams and working with many other people to collaborate and see if we can get agriculture a seat at that table in these conversations.
I think that’s really important, we have such a great story to tell about how, especially through COVID, we continue to put food on the shelves and on plates all around the world, and how we’ve been able to remain resilient. And at the same time, we if we look back further, you know, 20, 30, 40 years, how much more sustainable we’ve become over this time, how more efficient we’ve become, and how that’s only going to continue through innovation. We need to really get that message out there that innovation technology is going to help us to make this leap.
We’re already seeing companies like Chipotle and Panera putting environmental impact statements on their menus. And so people are starting to think about how they will change their diets. We’re seeing this as a huge trend, especially with millennials, of actually changing their diet based on what they perceive as more environmentally friendly. And so this is a critical area for our industry to get behind. We’re working with AFIA, as are many others, to talk about this and think about how we move that forward.
I think there’s a real urgency, not even the next 12 months, really, it’ll be over over the next six months, I think, to start to think about this in a faster way. We’re taking elements of our business. One, for example, E-CO2, which was based in the U.K., that was a business that focused with or worked with retailers and help them to understand the environmental impact of farming. We’re now taking that globally, as this is something that has been a huge trend this year and, again, I think, an area for producers to differentiate themselves and hopefully create value opportunities.
Roembke: You’ve mentioned some of the trends brought on by the COVID-19 pandemic. What lessons do you think that the feed industry can learn from the COVID outbreak? And how can they apply that knowledge to improve their operations and their resiliency?
Lyons: Yeah, you know, again, I think that it is a period of time where we as an industry need to feel, you know, proud of what we were able to achieve. We were able to continue to operate and we need to see that through to the end of COVID. And then I think to also look at that as an opportunity.
We’re an industry that actually has ranked very high in terms of the trust and respect that people have for us. But I think one of the big trends and something we saw was really trust within the supply chain. And so making sure that not only you have a good understanding and relationship with your suppliers, but also with your customers is a critical element. I think that there’s a lot that we can do there.
I also think one of the things that can drive that — and there’s another big, big trend throughout this time — has been digitalization. So we’ve seen Satya Nadella of Microsoft talking about how they saw digital transformation over a few months that they would have anticipated over a period of years. And I think that if companies haven’t gone through that, they need to make sure they do because this is really changing the way all companies are operating. And so you know that that’s a big element. And it’s not just your internal processes, but it’s also I think what is taking place in terms of ecommerce, massive acceleration of ecommerce throughout COVID. And I don’t think that’s going to go back to the way it was.
And so these are areas that I think are worth a look and investment in as we go forward as an industry.
Roembke: Excellent. And thank you so much for sharing your thoughts. For additional global feed tonnage data and further analysis, you can join Alltech’s ONE Virtual Experience, where you’ll find the results of the 2021 Agri-Food Survey, and much more. Visit one.alltech.com to join the conversation.
Thank you so much, Dr. Lyons, and thanks to everyone for tuning in.
