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COVID-19: Status quo of the animal nutrition industry

Here’s a brief overview from my vantage point on where we stand today as an industry after a disastrous coronavirus (COVID-19) pandemic lockdown, which hopefully saved many lives.

Collage of Flu COVID-19 virus cells in blood under the microscop
mr. Smith | Bigstock.com

The whole industry follows the fate of animal producers with profit lines being wracked by uncertainty and volatility.

Here’s a brief overview from my vantage point on where we stand today as an industry after a disastrous coronavirus (COVID-19) pandemic lockdown, which hopefully saved many lives. It did leave, however, a wave of destruction on most industries – save grocery stores – and ours did not fare much better than the rest.

  1. Uncertainty about imported additives

Nobody knows how feed additives companies will react in the near future regarding sourcing raw materials. Many already consider bringing production closer to home – and good for them. Others will incur higher costs, anyway, to ensure higher biosecurity standards abroad. Buyers hoard those additives they consider absolutely essential. Others remove from formulas those additives they consider auxiliary, at best.

  1. The future of corn and soybean meal

Animals are being slaughtered (or not) but meat sales are not there. Breeding stock is going down everywhere. So, less need for feed to consume combined with the continuing trade war may depress commodity prices. Soybeans might see increased demand due to shortage of DDGS – depending how fast the oil war ends, but corn will probably be abundant.

  1. Animals that cannot be marketed

This is the saddest of all stories as anecdotal evidence suggests many animals are being put down or left to roam wild, depending on the country they are in. Clearly nobody wants to go public about it. Some governments have even issued guidelines on euthanasia and vets are busy. Hopefully this is a short-lived occurrence. Most producers, however, try to weather this short bad time by feeding high-fiber diets to slow down growth. Others donate milk, meat and eggs to those in need. Desperate times for all.

  1. Changes in feed formulations

For any and all of the above reasons, feed formulators are busy shorting out their formulas for the near future. It is a tough job that requires strong tools and expertise as there is a massive number of formulas to be reworked.

  1. Overbuying of sensitive feeds

Complete diets (and concentrates) for young animals, including milk replacers, are being hoarded as much as possible (they are sensitive to prolonged storage). We shall see this going up when the weather cools down again, when a potential second COVID-19 wave hits.

  1. Expect ups and downs in feed prices

If you have read up to this point, you have already surmised that feed/additive prices are in for a roller-coaster year (or two). The same goes for the profit lines of all related industries. It is not only animal producers that suffer, but these have less deep pockets than some other entities. Government intervention is already underway in many countries.

  1. The end of face-to-face meetings

Virtual events are a dozen a day, and physical events are being canceled constantly. Some of the latter may take place during the summer, but who will risk attending? Virtual meetings appear to be the new normal, at least for the immediate future.

  1. What to do with the mountains of protein products?

Already governments advocate people to eat more of foods that have blocked the food chain. Some suggest “steak nights,” others to “add cheeses everywhere.” Same goes for potatoes (eat twice a week) and milk (drink more and more). The only happy ending I can think of is the suggestion by one country to drink more wine, as it has a surplus of 54 million barrels.

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