The evolution of the global feed industry tracked by annual report.
In 2015, World Feed Panorama celebrates its first 25 years. During this time the world market for compound feeds has grown by more than 300 million metric tons or nearly 60 percent.
Our series of annual checks on world production began in 1990, with the first report estimating the volume of complete compounds produced worldwide at 537 million metric tons — compared with an estimate of 370 million tons for the global output in 1980.
Early reports in the World Feed Panorama series also calculated changes in the average quantity of feed produced per person of world population. From this it seemed the average had grown from 82 kg per person in 1980 to 101 kg in 1990. Notably, it would then stay at or around the 1990 level for the next 10 to 15 years before starting to rise again under the influence of improved economic growth. Today it stands at approximately 119.5 kg per person.
25 years of change
Around the world regions in 1990, Europe supplied 179 million metric tons or one-third of the world total. In volume terms, therefore, it has added just 16 million tons or about 9 percent over the last 25 years. By contrast, Asia-Pacific has come close to doubling its 1990 level of 165.5 million tons. North America’s contribution is up approximately 56 million tons or 44 percent from the 127 million tons produced in 1990.
Latin American compound feed production has expanded by 80 million tons from the regional total of 55 million tons recorded for 1990, suggesting a 25-years growth rate of 145 percent. The combined zone of the Middle East plus Africa is an even bigger winner, gaining around 46 million tons or nine-fold from its 1990 volume of 5.7 million tons.
Just about the only geographic zone that was witnessing a downturn for feeds from industrial mills in 1990 covered central and eastern Europe. With the falling of the Berlin Wall in 1989 amid a re-shaping of the former Soviet Union political map, these center-east European countries suffered a slump that would bring their feed volumes to an all-time low within five years.
The total output for the region was put at 38 million tons in 1990 and only 21 million tons by 1994. As an individual example, Romania reported producing 11 million metric tons in 1990, but saw this amount fall by two-thirds in the next five years; Romania today has an output of under 3 million tons from industrial mills alongside a similar quantity mixed on livestock farms.
Shifting business models
Along with the more general picture of a significant expansion, big structural changes have occurred over the past 25 years in the feed industry. One area to watch involved the tonnage breakdown per country between retail mills and integrators. Similarly, there was a marked change in the percentage of feed production attributed to co-operatives.
In compiling the 1990 edition of World Feed Panorama, we noted that good information on the retailer/integrator split could be obtained from data in Mexico. In 1990 this showed Mexico’s commercial mills producing 3.54 million metric tons, whereas 9 million tons originated from the integrated sector. Compare that with the split for Mexico in 2014. Last year, according to national feed association Conafab, some 10.38 million tons was produced for commercial sale and 18.5 million tons came from integrator mills.
How to measure and estimate the tons of feed made by integrations globally soon emerged as a key challenge for World Feed Panorama, not least due to a blurring of boundaries between the complete feed production of an integrator and the on-farm feed mixing of larger farms. Farm-mixed feeds were certainly significant in 1990, such as in Canada where we found that industrial mills at the time accounted for no more than half of the total of 15 million tons of feed supplied. From a European perspective, the home-mix influence was felt especially in supplies of feed for pigs.
Co-operatives were a force in feed in Europe and the USA in 1990, supplying about one-third and one-fifth of all feeds respectively. They have continued to provide several of the largest feed players both nationally and regionally, only now the enterprise may be structured as the privately owned subsidiary of a farm co-op.
Decades of growth
In round terms, the then 15 member states of the European Union in 1990 produced 105 million metric tons of feeds and therefore exceeded the U.S. primary feed market of about 97.5 million metric tons. Although both would grow in the next 10 years, neither could match the growth rate averaging over 8.4 percent per year recorded by China for the period 1990-2000 from a starting level of almost 38 million metric tons.
Industrial feed manufacturing in the European Union of 1990 meant about 4,800 mills with an average annual production capacity of 24,000 metric tons. By comparison, preliminary data for 2014 show around 3,800 feed-mills in the EU-28 producing an average of 40,300 metric tons per mill per year.
Our own database indicates that the EU membership in 1990 provided nearly 59 percent of the all-Europe feed total. Their own production was divided 35 percent for pigs, 30 percent for ruminants and 28 percent for poultry. European Feed Manufacturers’ Federation (FEFAC) data for 2014 suggest the EU ranking by species has altered fundamentally. Now it is poultry in the lead across the enlarged community with almost 34 percent, as the pig tonnage falls to around 31 percent and the ruminant share to little more than 21 percent.
World Feed Panorama has traced an equivalent theme at global level. Back in 1990 we were reporting that more feeds had been produced industrially for pigs than for other species. Today it seems that pig feeds represent under 30 percent of the world total volume and the market share for poultry feeds is close to 50 percent.