Poultry feed balances cost with market demands

Leanr about how changing consumer protein preferences, regulations and macro trends impact global poultry feed production and formulations.

Poultry-Nutrition-Survey-2020
(Background: ARTYuSTUDIO | iStock; Chickens: Yakovliev | iStock)

WATT Global Media’s 2020 Poultry Nutrition & Feed Survey reveals how changing consumer preferences, regulations and macro trends impact global poultry feed production.

African swine fever’s (ASF) impact on global animal protein markets, evolving consumer meat consumption trends, the wages of trade uncertainty and a push to reduce and eliminate antibiotic usage will continue to impact poultry and poultry feed production for years to come. The 2020 Poultry Nutrition & Feed Survey offers a firsthand look at how these changes and challenges have impacted feed formulations as poultry feed industry stakeholders from around the world weigh-in to share their experiences.

Of the 385 participants, 44% were nutritionists, consultants and veterinarians; 24% work in live production management or as the owner of a poultry farm. Here’s their take on what’s to come in poultry feed production and nutrition in 2020 and beyond.

While most of the survey respondents have not been impacted by the effects of African swine fever, 36% cite it as the reason their company is increasing its poultry production. (WATT Global Media)While most of the survey respondents have not been impacted by the effects of African swine fever, 36% cite it as the reason their company is increasing its poultry production. (WATT Global Media)

Impact of African swine fever

Everyone involved in animal agriculture has been closely watching the developments with the spread of ASF since it was first detected in August 2018. The disease, which has greatly impacted pork production in China and Southeast Asia, has taxed the world’s protein supply, bolstered poultry and aquaculture in the region, and decreased global feed production volumes and feed additive sales.

Most of the survey respondents (38%), however, have not been impacted by ASF, but an additional 36% cite that, because of the disease, their company is gearing up its poultry production and 23% feel it contribute to improved profitability in 2020.

Nearly 50% of survey respondents are optimistic about their company’s 2020 profitability, a slight dip from 2019. (WATT Global Media)Nearly 50% of survey respondents are optimistic about their company’s 2020 profitability, a slight dip from 2019. (WATT Global Media)

Business outlook

Nearly 50% of respondents were optimistic about their company’s 2020 business outlook. While a slight dip from 2019’s figure, the rest seem to now feel that business is flat.

Discussing the most pressing challenges their company’s face in 2020, 78% of survey respondents cite grain costs and quality (65%) at the top of the list. Feed and food safety (59%) and tightening or deteriorating margins (57%) were also among their top concerns. Volatility in the cost of micro-ingredients and feed additives (47%) also causes difficulties.

Trade uncertainty

Sixty-seven percent of this year’s survey respondents feel geopolitical instability will impact their business in 2020. Specifically, 87% of respondents cite the impact of international trade disputes and exchange rate fluctuations as their key concerns.

In 2019, 42% of respondents feel trade uncertainty negatively impacted their business — with an equal amount feeling it had no impact at all. This year, 28% feel it will improve as progress has been made, but 30% remain doubtful and believe it will continue to hinder business and 41% chose not to speculate.

The growing mainstream popularity of plant-based meat alternatives is the No. 1 threat to increased protein consumption, but its strength is undoubtedly tied to consumer concerns about animal production’s impact on the environment and animal welfare. (WATT Global Media)The growing mainstream popularity of plant-based meat alternatives is the No. 1 threat to increased protein consumption, but its strength is undoubtedly tied to consumer concerns about animal production’s impact on the environment and animal welfare. (WATT Global Media)

Consumer trends

Given all the press and hype, it’s safe to say 2019 was the year of plant-based meat — and that’s reflected in this year’s survey responses.

When asked which consumer protein consumption trend is the greatest threat to poultry production, 29% cited plant-based meat alternatives. Twenty-seven percent note that they believe consumer environmental concerns will result in less animal protein consumption in the future. Meanwhile, only 7% are eyeing cell-cultured meat alternatives as a looming competitor.

While most respondents (42%) feel plant-based meat alternatives assume a minimal amount of animal protein market share, 30% predict it could take upwards of 8% over the next decade. (WATT Global Media)While most respondents (42%) feel plant-based meat alternatives assume a minimal amount of animal protein market share, 30% predict it could take upwards of 8% over the next decade. (WATT Global Media)

However, over the next decade, most survey respondents (42%) feel the plant-based meat offerings will take no more than 5% of traditional meat’s market share, while 27% feel it could be as high as 7%. The additional 30% of respondents predict it will exceed 8%.

As it relates to poultry feed formulations, respondees cite antibiotic-free (36%) and cage-free production (20%) as the consumer trends having the greatest impact on their feed costs.

As with previous years, antibiotic reduction and elimination continue to challenge feeding programs. (WATT Global Media)As with previous years, antibiotic reduction and elimination continue to challenge feeding programs. (WATT Global Media) Twenty-two percent of respondents report their operation(s) being 100% antibiotic-free while an additional 29% report more than 50% of their poultry production is free of antibiotics. (WATT Global Media)Twenty-two percent of respondents report their operation(s) being 100% antibiotic-free while an additional 29% report more than 50% of their poultry production is free of antibiotics. (WATT Global Media)

Antibiotic-free production

More than 20% of respondents report that their poultry production is 100% antibiotic-free. An additional 29% note that their production is between 50% and 99% free of antibiotics; 16% confess they have not eliminated or reduced antibiotics from their production system.

Most respondents associate added costs with the introduction of antibiotic-free poultry rations; 10% believe their costs remain the same post-antibiotic elimination. However, 26% of participants report their feed costs increasing by 1 to 5%, and 17% feel it is close to the 5 to 10% range. Ten percent cite cost increases above 10%.

Unreliable antibiotic alternatives, high feed additive costs and a lack of buy-in on individual farms continue to challenge poultry producers’ antibiotic-free production efforts. (WATT Global Media)Unreliable antibiotic alternatives, high feed additive costs and a lack of buy-in on individual farms continue to challenge poultry producers’ antibiotic-free production efforts. (WATT Global Media)

In addition to the cost of the ration, several factors are contributing to the frustration and challenges of antibiotic-free production. Forty-two percent of respondents feel the inconsistent results they’ve experienced with feed additive alternatives have complicated the effort; an additional 29% cite the prohibitive costs of these additives. Another 29% struggle to overcome the production losses when antibiotic-growth promoters (AGPs) are eliminated. Beyond the feed, failed enforcement and adoption of improved farm management practices (27%) negate the nutritionist and veterinarian’s efforts.

Respondents have cited increased incidents of coccidiosis (52%), necrotic enteritis (51%) and colibacillosis (40%) as antibiotics have been removed from production.

Respondents note an uptick in coccidiosis and necrotic enteritis in their flocks once antibiotics have been reduced or eliminated from production. (WATT Global Media)Respondents note an uptick in coccidiosis and necrotic enteritis in their flocks once antibiotics have been reduced or eliminated from production. (WATT Global Media) Most respondents (26%) report moderate increases to feed costs — 1 to 5% — when formulating antibiotic-free rations. (WATT Global Media)Most respondents (26%) report moderate increases to feed costs — 1 to 5% — when formulating antibiotic-free rations. (WATT Global Media)

Feed additive solutions

As antibiotic reduction and elimination strategies take hold, poultry feed producers and nutritionists have turned to feed additive solutions to tackle production and health challenges.

According to 70% of survey participants, their company is actively exploring, testing or using feed additives as antibiotic replacements or alternatives.

Probiotics and organics acids — when used alone or in combination with other additives — rank highly as effective solutions in antibiotic-free diets. (WATT Global Media)Probiotics and organics acids — when used alone or in combination with other additives — rank highly as effective solutions in antibiotic-free diets. (WATT Global Media)

When asked to rate the efficacy of five feed additive categories used for antibiotic replacement, respondents have had the best experiences with probiotics (72%) and organic acids (69%). While more than 50% of respondents report successes with the effectiveness of prebiotics and phytogenic feed additives, upwards of 25% do not have experience with these product categories.

This year, 61% of survey respondees plan to increase their inclusions of probiotics and prebiotics (53%). Essential oils (46%) and phytogenic feed additives (45%) will also see an increase. Meanwhile, more than 25% report decreasing their use of therapeutic and subtherapeutic antibiotics.

As part of their AGP replacement strategy, respondents report utilizing and/or combining probiotics (69%), organics acids (64%) and enzymes (59%). Forty-seven percent include phytogenic feed additives. (WATT Global Media)As part of their AGP replacement strategy, respondents report utilizing and/or combining probiotics (69%), organics acids (64%) and enzymes (59%). Forty-seven percent include phytogenic feed additives. (WATT Global Media) In 2020, respondents plan to increase their use of probiotics (61%), prebiotics (53%), essential oils (46%) and phytogenic feed additives (45%). (WATT Global Media)In 2020, respondents plan to increase their use of probiotics (61%), prebiotics (53%), essential oils (46%) and phytogenic feed additives (45%). (WATT Global Media)

Who’s behind the formulations?

Of the 2020 survey participants, 39% of the companies represented employ in-house nutritionists, 17% rely on independent consultants and 25% utilize both in the development of their company’s nutrition program.


About the 2020 Poultry Nutrition & Feed Survey

The editors of Feed Strategy, WATT PoultryUSA, Industria AvĂ­cola, Egg Industry and Poultry International surveyed 385 people producing and using poultry feed worldwide. The survey sought to define the feeding and external trends shaping these businesses during the last 12 months. The survey was conducted in English and Spanish.

Participants included:

Nutritionists: 18%

Consultants: 14%

Veterinarians: 12%

General administration: 8%

Poultry farm owner/grower: 14%

Live production management: 10%

Marketing and sales: 10%

Feed mill/plant operations: 4%

Quality control, purchasing agent, other: 10%

Responses from:

Latin America: 34%

United States/Canada: 33%

Asia/Pacific: 11%

Europe: 10%

Africa: 10%

Middle East: 2%

Sectors:

Consultant/veterinarian/nutritionist: 29%

Broiler production: 14%

Feed manufacturing: 11%

Egg production: 15%

Manufacturing/distributing feed additives: 10%

Breeder farm/hatchery: 5%

Premix manufacturing: 2%

Turkey/duck production: 2%

Poultry processing: 5%

Other: 7%

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