European feed industry and 2022 projection

All of the ‘top line’ EU Green Deal issues affecting the livestock economy will matter in 2022. We would stress the future legal framework for seeds produced by NGTs as one critical innovation topic, which from a legal perspective may have a more lasting long-term impact than some other measures. The outcome of this debate will determine the ability of the EU to effectively address the societal aspirations for food chains that are respectful of the environment and animal welfare, and at the same time to secure sufficient food supply in particular regarding home-grown vegetable protein sources.

Asbjørn Børsting
President of FEFAC (European Feed Manufacturers’ Federation)

We continue to shed light on the 2022 agenda of the feed industry with Asbjørn Børsting, President of the European Feed Manufacturers’ Federation (FEFAC), which has been representing the global feed industry, primarily Europe, for more than half a century. We talked to Mr. Børsting on many issues from sustainability to antibiotic-free production, from responsible sourcing to environmental footprint and carbon emissions, from alternative feed ingredients to feed safety, from animal welfare to feed prices.

Reminding that FEFAC developed a comprehensive view on sustainable feed production by publishing Feed Sustainability Charter in September 2020, Asbjørn Børsting underlines that they set 5 goals regarding sustainability in their Progress Report released in June 2021. Børsting lists the prominent issues in this latest progress report as follows: reducing the environmental impact of feed and livestock production, the sourcing of responsible & conversion-free soy and the increase of nutrient efficiency through animal nutrition.

So, does the agenda of 2022 consist only of these issues? Of course not… FEFAC President Børsting evaluated the agenda items of the feed and premix industry one by one for our readers. Check out the details of our interview to see what awaits the industry as we prepare to begin a new year.

Mr. Børsting, before starting questions about the European feed industry, can we get to know FEFAC a bit more? Could you explain FEFAC’s mission and objectives? What is FEFAC’s role in the feed industry? Who are its members and what proportion of European compound feed & premixes do your members represent?
FEFAC is the European representative of the compound feed & premixes manufacturers of feed for food producing animals. It was established over 60 years ago. FEFAC represents 23 national Associations in 23 EU Member States as well as Associations in Norway, Russia, Serbia, Switzerland, Turkey, and the United Kingdom with observer/associate member status.

Being based in Brussels, a key function we have is to represent, defend and promote the interests of the European compound feed and premix industry with the European Institutions. In the past decade and a half, FEFAC has increasingly been playing a proactive role in the development of tools and guidance for members, for example to facilitate market transparency or good manufacturing practices.

Can you give some information about the European animal nutrition industry and compound feed & premixes market? What can you say about the size of the market and its growth potential?
Over the past years European compound feed production has been stable around 160 million tonnes per year (EU-27 incl. UK). The European compound feed industry employs over 100,000 persons on app. 3,500 production sites often in rural areas, which offer few employment opportunities. The growth potential inside the EU is fairly limited in line with modest growth potential for farm animal production. Poultry production is expected to see some growth opportunities while pork and dairy products are expected to remain stable with beef production continuing its structural decline.

The animal nutrition and compound feed industry has been at the centre of a very busy sustainability agenda in recent years. Among the issues discussed are antibiotic-free production, responsible sourcing (deforestation-free supply chains), environmental footprint & carbon emissions, alternative proteins, feed safety and animal welfare. European feed industry innovation pioneers the world’s trends in many areas. Which of these and similar issues do you think will be at the forefront of the 2022 agenda of the European feed industry?
All of the “top line” EU Green Deal issues affecting the livestock economy will matter in 2022. We would stress the future legal framework for seeds produced by new genomic techniques (NGTs) as one critical innovation topic, which from a legal perspective may have a more lasting long-term impact than some other measures. The outcome of this debate will determine the ability of the EU to effectively address the societal aspirations for food chains that are respectful of the environment and animal welfare, and at the same time to secure sufficient food supply in particular regarding home-grown vegetable protein sources. It is now clear for all that some of these aspirational targets set forth in the Farm to Fork strategy have the potential to depress productivity leading to lower production of agricultural products. We do not expect that consumer behaviour and preferences for food will change overnight. Only the political will to allow new technology to play its part in reconciling sustainability and food security demands can reverse potentially the negative impacts of the farm to fork strategy. The nature of the debate on NGTs and the orientation taken will set the direction of travel for the future shape of the announced sustainable food systems framework legislation: an outdated EU agriculture model blocked from access to innovative technologies resulting in increased imports from Third Countries on the one hand or a competitive, modern resource efficient EU agriculture able to meet EU societal expectations on climate change, biodiversity and increased resilience of food production systems.

Sustainability is one of the most important topics of our age. What does sustainability mean for the compound feed and premix industry? What is being done or should be done for sustainable feed and premix production and sustainable animal husbandry? What is the importance and role of the compound feed and premix industry in this process?
As a topic, sustainability has gained a lot of importance and visibility in the past years. This trend will continue now that we are seeing concrete legislative proposals from the European Commission appear, as part of the Farm to Fork Strategy. The increased focus on sustainability will provide challenges and opportunities for the compound feed and premix industry. Our sector is well-equipped to deliver innovative solutions to help the livestock sector to successfully tackle key Farm to Fork targets, but we cannot ignore that there are strong public voices with a simplistic view on sustainable food production calling for a reduction of the livestock population and animal product consumption, regardless of what the sector can offer as sustainable solutions.

FEFAC has developed a comprehensive view on sustainable feed production with the publication of its Feed Sustainability Charter back in September 2020. In June 2021 we already released the first Progress Report. We have compiled the sustainability topics within five ambitions that we see the sector needs to address, together with its value chain partners. The most prominent ones are about reducing the environmental impact of feed and livestock production, the sourcing of responsible & conversion-free soy and the increase of nutrient efficiency through animal nutrition. At the same time, we also see the role of animal nutrition to enhance farm animal health and reduce the need for antimicrobials as a proactive contribution of the feed sector in the sustainability domain.

What do you think about alternative protein sources (single cell proteins such as insects and algae, etc.) that has become a rising trend in the feed industry? How do you think such alternative feed ingredients will contribute to sustainable feed production? Do you have an estimation of the current use of such alternative sources in feed production?
Many of these alternative resources are still at an early development stage and production costs remain high, combined with limited capacity issues and scaling affects. They may provide an economically viable option in certain specialty feed segments nutrient-dense feeds such as fish feed or feed for young animals. For other types of feed, these options do not seem viable yet. For insects, the key factor is the type of feedstocks that is used for their production. As long as insects are fed with former foodstuffs or co-products such as wheat bran, i.e. feed that may be used directly to feed pigs and poultry, the viability of an intermediate stage in the value chain poses challenges regarding nutrient efficiency, even if the final product is of high quality and nutritional interest. Likewise, for algae, the production and processing system is still quite energy-demanding. Naturally, both insects and algae share an important feature of being able to convert feedstock sources not normally used by humans or farm animals, into feed or food. This is certainly an interesting route to investigate and which is perfectly in line with the concept of circular economy. But of course this requires a thorough risk assessment stage to prevent any impediment for guaranteeing feed safety. The European feed industry remains fully conscious and alert of the hard lessons learned of previous feed safety crises which often started in the “waste bin”.

Another topic is “feed safety”, which is an extremely important issue both for animal health and indirectly for human health. Could you give some information about new approaches and alternative solutions to ensure feed safety in Europe?
Enormous progress has been made over the last 20 years to increase the overall feed safety standards and the ability of the feed chain to deliver against these. Few years ago, there was an evaluation made of the General Food Law and there was a large consensus to consider that, in both the food and the feed areas, this was one of the most successful pieces of EU legislation. The “big danger” for feed operators is now to consider this as an acquis! This cannot be more wrong: global warming will continue to affect agronomic conditions and the aspirations for using less crop protection products will inevitably lead to increased prevalence of more undesirable substances, such as mycotoxins or botanical toxins. The pressure will also increase on feed manufacturers to use more co-products (where often certain contaminants are accumulated). They will also be asked to use more recycled nutrients (e.g. phosphates and other minerals). Ensuring the integrity of the feed chain will remain a constant challenge for the whole of the society but maybe even more for the feed chain to keep the feed gate clear from hazardous materials and hazardous practices. Feed Hygiene and HACCP based auto-control systems have more than ever a role to play to provide assurances to the value chain partners, as EFSA highlighted with its project on impact of circularity on the vulnerabilities of the feed and food chain.

The European Union (EU) aims to zero its carbon emissions by 2050. The livestock industry is also considered to have a significant share in carbon emissions. How do you foresee that the EU’s carbon emissions target will have an impact on the compound feed and livestock industry? Do you think that various feed ingredients, feed additives or alternative feed raw materials that have been introduced to the market recently can make an effective contribution to reducing methane emissions and carbon emissions?
Carbon emissions from livestock production are most certainly catching a lot of political and societal attention, just looking at the recent COP-26 declaration and related pledges (e.g. on methane emissions). A large share of the feed-related emissions are estimated to stem from deforestation linked to feed material use, in specific soy. This is therefore a key challenge to tackle. Indeed at farm level methane emissions from enteric digestion by ruminants are another key source. We’re pleased to see the large amount of research going into finding functional feed additives and select feed materials and feeding strategies that could help here, with some of them already seeing some market uptake or being close to authorisation as feed additives on the EU market. Now, the challenge is the same as for AMR: how to convince / reward farmers for investing in these new feeding techniques and systems, often more expensive. Member States have with the National Strategic Plans (as part of the Common Agricultural Policy) a tool at their disposal to stimulate the uptake of innovative solutions and practice by farmers.

Finally, can we talk about feed prices? Feed prices have become a major problem for farmers in many parts of the world in recent years. What were the factors that most affected the increase in feed prices? Supply problems caused by Covid-19, global climate change, supply-demand balance, drought, etc. What kind of process awaits producers in terms of prices in the upcoming period, and are there ways to reduce feed costs/prices?
The overriding driver for the ongoing global grain market rally is increased global demand in the wake of the Covid recovery since the end of 2020. The current market trends are exacerbated by freight rate issues linked to limited availability of cargo space and historically low ending stocks for some key commodities as well as market distortive action by certain governments imposing export taxes or restrictions for key grain commodities. As such there is sufficient supply of these commodities, but we do not see any short-term prospect of lowering current market tensions. For the feed industry this means to strengthen efforts to further increase feed efficiency as well use of co-products and alternative feed sources and additives as mentioned above but also including energy rich components such as processed former foodstuffs. We still use only use 80% of the genetic potential of farm animal, so there are further important efficiency gains to be realised to improve nutritional performance of our farm animal population.