The U.S. animal feed industry is expected to grow an estimated 2.5% to 254.6 million tons (worth roughly $48.8 billion USD) by 2025. Should the industry encounter further disruptions in processing and slaughter numbers or potential trade issues due to the ongoing coronavirus (Covid) pandemic, this number could decrease. However, should conditions quickly improve; consumption could increase more than 2.5%.
The United States is one of the biggest players in the global animal feed industry. The influence of the members of the American animal nutrition industry on both feed production and the development and trends of the industry is extremely high on a global scale. Therefore, it is one of the leading markets that should be followed carefully.
We interviewed with Constance Cullman, President and CEO of the American Feed Industry Association (AFIA), which represents more than 650 domestic and foreign sector players and is the world’s largest organization in this field. We asked questions which we are curious about the developments, expectations and potential in the American feed industry and in the market.
Cullman, who is also President of the Institute for Feed Education and Research (IFEEDER), states that they predict the US animal feed industry will grow by an estimated 2.5 percent by 2025, with an approximate value of the market reaching $48.8 billion.
You can find more details on the American feed industry in our interview with Ms. Constance Cullman.
First of all, can you inform us about AFIA? Can you explain the mission of AFIA, who its members are, and its role in the feed industry? What fraction of American feed manufacturers do your members represent?
Founded in 1909, the American Feed Industry Association (AFIA) is the world’s largest organization devoted exclusively to representing the business, legislative and regulatory interests of the U.S. animal food industry and its suppliers. With over 650 domestic and international members, the AFIA represents more than 75% of the feed and 70% of the non-whole grain ingredients manufactured in the United States.
Could you give some information about the American feed industry? How many feed manufacturers are there in your country and how much is their average annual production?
In 2016, more than 6,200 animal food manufacturing facilities contributed $297.1 billion in U.S. sales.1 In 2019, America’s domestic livestock and pets consumed 284 million tons of feed and pet food.2
What can you say about the size and growth potential of the compound animal feed market in your country?
Based on recent research commissioned by the Institute for Feed Education and Research (IFEEDER), the U.S. animal feed industry is expected to grow an estimated 2.5% to 254.6 million tons (worth roughly $48.8 billion USD) by 20253. Should the industry encounter further disruptions in processing and slaughter numbers or potential trade issues due to the ongoing coronavirus (Covid) pandemic, this number could decrease. However, should conditions quickly improve, consumption could increase more than 2.5%.
What is the role and place of the American feed industry in the international feed market, especially in terms of production and exports? Which feed types are coming to the fore in production and exports?
In 2020, the overall export value for feed, feed ingredients and pet food increased by $874 million, or 7.2%, over 2019, and the total volume of exports of these products increased by 1.1 million metric tons, or 3.5%, during that time.4 The top five exports by value include: soybean meal ($3.7 billion USD), dried distillers grain ($2.3 billion USD), dog and cat food ($1.7 billion USD), animal feed preparations ($1.6 billion USD) and forage products ($1.5 billion USD). The top five exports by volume include: dried distillers grains (10.9 million metric tons), soybean meal (10 million metric tons), forage products (4.7 million metric tons), corn gluten meal (1.6 million metric tons) and animal feed preparations (1.5 million metric tons).
How has the American feed industry been affected by the Covid-19 pandemic? What challenges were witnessed in processes such as supply-demand and supply chains?
Immediately following the coronavirus’ introduction into the United States in March 2020, the AFIA’s priority was to ensure our animal food manufacturing members could keep their doors open, providing food to feed the nation’s livestock and pets throughout the crisis while also keeping their employees safe. Over the past two years, we have learned a lot, with many of our members voluntarily modifying their policies and practices to comply with changing federal regulations around workplace safety. This has led to improved biosecurity as well – something that benefits us in the fight against other viruses, such as African swine fever (ASF).
We also adapted to the changing marketplace. With many protein and dairy foods being diverted from foodservice to grocery stores, our members worked hand-in-hand with their customers to adjust to these changing demands. We are currently partnering with others in the agriculture industry to resolve ongoing supply chain issues at U.S. ports, where empty shipping containers are being returned to Asia without being loaded with U.S. agricultural commodity exports as well as the imposition of millions-of-dollars-worth of unreasonable punitive charges. This has cost our members not only financially but also in customer satisfaction, given the difficulty members have experienced in fulfilling orders in a timely and cost-efficient manner.
Our industry is also struggling to fill open positions at manufacturing facilities, an economywide problem that has only been exacerbated by the pandemic. We are working with others throughout the U.S. agricultural value chain to call for federal policy changes that facilitate enhanced training of our current workforce as well as preparing and developing a next-generation workforce.
Overall, we are committed to improving the long-term business climate for our industry as we know that our manufacturing facilities are playing a vital role in the recovery of the U.S. economy post-pandemic.
In recent years, animal nutrition industry has been at the center of a very busy agenda. Topics such as antibiotic-free production, sustainability, environmental footprint, carbon emissions, alternative proteins, feed safety and animal welfare are discussed widely. How do all these agenda affect the American feed industry? Which issues are particularly discussed among the agenda of the feed industry in your country?
Providing safe, quality animal food is our raison d’être and always one of the industry’s top priorities. In the United States, our industry has been working for years to implement the Food Safety Modernization Act (FSMA) requirements – a sweeping overhaul of the country’s food safety regulations put in place over 10 years ago. While our members have made considerable progress in adapting to this regulation, with all-sized facilities now required to be in compliance, we are now working to educate our members on the ways they can continue to improve while simultaneously doing our best to address the evolving landscape.
We also continue to impress upon the Joe Biden administration that to remain competitive in a global landscape, we must also embrace new technology that could improve animal nutrition and help the United States meet its climate goals. This review process is currently lengthy and inefficient, which costs U.S. animal food companies an average of $1.75 million USD annually in lost revenue per ingredient for every year spent in the FDA’s ingredient review process. We are also urging the administration to modernize its regulatory approach for labeling and regulating feed additives that could reduce enteric emissions to come to market quicker. Right now, other countries around the world are moving forward with emissions-reduction technology four or five years earlier than we are in the United States, putting U.S. farmers and ranchers at a trade disadvantage.
Lastly, is there anything else you would like to add or any message to the feed industry?
As president of the Institute for Feed Education and Research (IFEEDER), I am also proud of a new project launched this fall to develop a sustainability road map for the U.S. animal food industry.5 In our recent conversations with member companies, we have found that they are in varying stages of their sustainability journeys, but that they are eager to continue providing their customers with the information they need to achieve their climate pledges while meeting consumer’s expectations. We plan to evaluate the risks and opportunities for the industry by segment to determine how companies can broaden their corporate sustainability programs and embrace climate-smart initiatives with key stakeholders. Through collective and collaborative work, we know the U.S. animal food industry can continue to be solution-providers on several challenges impacting the production of food, such as reducing our environmental footprint and eliminating food waste.
References
1https://www.afia.org/feedfacts/feed-industry-stats/economic-impact/
2https://www.afia.org/feedfacts/feed-industry-stats/animal-food-consumption/
3Based on six cateogires of domestic livestock production – broilers, layers, turkeys, hogs, dairy cows and beef cattle. https://www.afia.org/feedfacts/feed-industry-stats/animal-food-consumption/
4https://www.afia.org/feedfacts/feed-industry-stats/trade-data/
5https://ifeeder.org/ifeeder-launches-industrywide-sustainability-project/
