While in some countries, such as the Netherlands, the topic of less animal protein is heavily discussed, consumer demand for animal products such as milk, eggs and meat is growing rapidly internationally. This high demand has contributed to higher feed prices over the past few years. However, in contrast to this demand, food production is becoming increasingly difficult and productivity is declining due to various legislations on topics such as food safety, environmental impact and animal welfare.
Director
Nevedi
The Netherlands, which sets an example to the world with its ability in agricultural product production and export, produces approximately 12.5 million tonnes (excluding co-products) of compound feed for farm animals every year. The Netherlands Feed Industry Association (Nevedi), which represents almost 100% of the feed industry in the country, focuses on 4 elements that are at the top of the agenda of the animal product industry in Europe: food safety, feed quality, sustainability and innovation… We had an interview with Henk Flipsen, the Director of the Association, where we discussed all these elements. Flipsen, who shed light on the contradicting situation of the agricultural sector in Europe with his words, drew attention to the increasing demand for animal products around the world and the production that is becoming increasingly difficult due to legislations. The details are in our interview:
Mr. Flipsen, could you give us some information about Nevedi? How many members do you have, who are your members and how much of the Dutch feed industry do they represent?
Nevedi is an association representing the Dutch feed industry, focusing on sustainability, feed quality, feed safety and feed-related legislation. So, we especially deal with the technical part of animal feed. In addition, part of our job is to represent employers in the negotiations with unions and other institutions on issues such as labor agreements, pension funds and safe working environments.
We have 75 members made up of different types of companies. They include premix and additive producers, milk replacers and suppliers of co-products to farmers. However, the majority of our members are companies producing compound feed for pigs, cows and poultry (55-60 companies). These companies account for about 95% of the whole feed production in the Netherlands. With all our members, we cover almost 100% of the feed production in our country, which makes us a good representative for the feed sector.
What is the total compound feed production in the Netherlands? What is the share of this production amount in the total compound feed production of the European Union?
According to the data of FEFAC, the total compound feed production in Europe is around 150 million tonnes. The share of the Dutch feed industry in this production is about 12.5 million tonnes. When it comes to numbers, we cannot say that we are the biggest producer in Europe, but I can say that we have a very efficient industry. Because more than 50% of all raw materials used in feed in the Netherlands are co-products. This is a serious efficiency factor in resource utilization.
The European livestock and feed industry has had to deal with many challenges in recent years: The Covid-19 pandemic, animal diseases such as ASF and avian influenza, Russia’s invasion of Ukraine, increasing legal legislations around sustainability. How do you evaluate all these agenda topics?
Our industry has been severely affected by all these processes. In particular, I believe that the Covid-19 pandemic was a wake-up call. Covid taught us how to deal with epidemic diseases, how to prevent them, antibiotic resistance and the link between the use of products in animal keeping and such diseases.
The wars in Ukraine and Israel have had serious international consequences. In particular, becoming less dependent on others has been one of the main topics that came to the forefront during this period and has been on the agenda of Europe and many other countries around the world. Today, all continents are talking about their own food and feed security. But even all these developments have not changed the idea that we need to work on climate change goals. Climate change is a very clear reality and now, everyone knows it.
Obviously, we need to take care of our environment and nature, but we also need to take care of food. Especially after we have seen that food production is an instrument in wars… I think all this has led to a change on the European level. We have the new European Commission coming up. As we can see from the election results, this Commission is no longer just focusing on climate and environment. It is also setting goals, naming them and giving instruments to achieve them. So that both markets and society can take time to find the solutions that are needed. I think this is the new agenda.
Especially after Russia’s invasion of Ukraine, there were serious problems in access to feed raw materials, which was reflected in feed prices. What would you like to say about self-sufficiency and feed prices?
After the start of the war in Ukraine on February 22nd, feed prices went up very fast per day, or even per hour. It was really crazy. I think the price of 100 kilograms of feed went up by 25% to 50%. In the following months, the prices stabilized again, but they are still higher than the feed prices before the war started. But the war is not the only reason for these high prices.
This has a lot to do with raw material positions in feed production and the energy sector using more co-products. In addition, while in some countries, such as the Netherlands, the topic of less animal protein is heavily discussed, consumer demand for animal products such as milk, eggs and meat is growing rapidly internationally. This high demand has contributed to higher feed prices over the past few years. However, in contrast to this demand, food production is becoming increasingly difficult and productivity is declining due to various legislations on topics such as food safety, environmental impact and animal welfare. I think there will be a shortage in food supply due to this situation, which contradicts the increasing demand for food, and consequently feed prices will not fall easily in the coming period. Anyone who has studied economics knows that when there is a lack of food supply, there will be rising demand, and in that case, prices are high. This is exactly why we need to talk to the chain partners and figure out how farmers can cover these feed costs. For farmers to continue producing and for low-income consumers to have access to food, they need to be able to sell what they produce at a normal profit margin.
Self-sufficiency is actually a contradiction to this whole process. How can we be self-sufficient? The European Commission talks about food security, self-sufficiency and getting less dependent, and now we come back to the same point. How are you going to do that? What is self-sufficient?
For example, in the Netherlands, more than 50% of the raw materials we use in feed production are co-products, which we buy from food companies. There are also foodstuffs that farmers produce on their own farms, such as maize and grass, but these are more limited. About 20% of the rest of the raw materials are imported, 80% of which come from Europe. Soybean meal, which makes up a small amount of the raw materials used, is imported from North and South America. In the end, in the Netherlands, our dependence on imports is dependent on Europe. So for us, being self-sufficient means being self-sufficient on the European level.
Across Europe, there are serious efforts and strict legal regulations to reduce carbon emissions. What is being done in the Netherlands in this regard?
We are talking about Europe, but there is already serious work in the Netherlands. The new Dutch Minister of Agriculture, who is open to supporting innovation, is focused on the fact that we have to deal with food security as well as climate goals. As a country we have to align with the European Commission, but we also have to take care of healthy, quality and payable food. I think the last one in particular is very important because people with lower incomes should also have access to healthy and good food.
As a feed industry, we are focusing on by-products that reduce methane emissions and use less energy, especially in ruminants. We think the feed ratio needs to be better than it is now and we are in favor of innovations that will enable this. As an industry, we are trying to increase our contribution to this process by selecting the right raw materials and feed ingredients that are well digestible and ensuring that feed is used efficiently. The fact that officials at the Ministry of Agriculture support this idea gives us hope that the feed sector can continue to contribute to climate goals.
But it is also unacceptable that the entire responsibility for this process, which imposes additional costs on farmers, is placed on the agriculture sector. Politicians have been saying for years that money is not everything. “We should take care of future generations, we have to look after the environment and nature,” they say. And they are right when, indeed, environment and nature are separate from farming. But in the opinion of the feed sector, and my personal opinion, farmers are a part of nature and the environment. So of course, farmers have to contribute to achieving goals in this area too. But it is not realistic to put all the burden on them. This could lead to the destruction of your agri-food complex.
What can you say about animal welfare? We know that this issue is being raised more and more, especially by European consumers.
Animal welfare is another high-profile issue in the Netherlands and in Europe. In our parliament and especially in some groups in society, there are important questions about the conditions in which animals are kept and fed. There are different ways of approaching this issue. First of all, anything we do in feed and everything we change has possibly a high-cost impact. So, the big question is: if we produce feed in the future with a higher cost, how is the farm going to pay for it? This is a big and interesting issue because we also talk about chain initiatives in the market. For example, if you want to buy the meat of animals that have been fed with regional raw materials or soy-free feed, or if you want to buy free-range chicken eggs, you have to be aware that this will have a higher climate impact. The more space you give to the chicken, the higher the climate impact. So how do we deal with that? When you have a higher cost, who is going to pay for it?
The only thing we can think of is if there is a demand from the market, someone has to pay for it and that’s the consumer.
The feed sector, farmers, the processing industry, retailers… In short, every partner in this production chain wants to make money because they are all enterprises. The farmer is often left with the bill for this whole process. The farmer has to deal with lower income and higher costs. This is a really big problem. And I think with all our efforts on feed, we have to find a solution to that. Because if you don’t have many healthy farms in Europe, you can’t say you have a healthy feed sector. And if you want a healthy feed sector or a healthy ‘agri-food complex’ in the Netherlands, you need a critical number of companies. And of course, these companies need a certain amount of money to run their business.
Can you tell us a bit about Nevedi’s sustainability goals and the Sustainable Animal Feed 2030 project?
A few years ago, we launched the Sustainability Charter 2030 on European level with FEFAC. As a part of it, we have a sustainability policy, as well as a manager dedicated to sustainability. And recently, we launched the monitor on sustainable feed.
Nowadays everybody talks about sustainable feed, but nobody has a real definition. If you ask 10 people, you will get 10 different definitions. So, two years ago, we made a measurable definition of what sustainable feed is. Because a definition that cannot be measured is an unstable definition. In addition, we created a system to measure 4 indicators that are related to sustainable feed and to convert it to numerical data, we call it 4 KPI’s (Key Performance Indicators): climate, circularity, biodiversity and the origin of raw materials. 2018 became our reference year for measurements, as it is the year that PEF (Product Environmental of Footprint) for feed was approved. Then, in addition to the Ministry of Agriculture, all partners in the meat, milk and egg production chain were involved in the process. Thus, we were able to make calculations on climate, circularity, biodiversity and the origin of raw materials based on the figures we received from our companies starting 2018. Based on these calculations, we set our 2030 target together with our chain partners and the government.
The second phase of our project will be to determine with our chain partners what actions we will take and how we will proceed. With our measurements we will be able to see the current trend and review if we need to change our goals from year by year. Based on these indicators, we can make the goals more difficult or lower the barrier. Here we can use the example of circularity in particular, i.e. the use of co-products. The use of co-products, which is an important aspect of sustainability, can be challenging for feed producers. Because nowadays it is much more common to use co-products in the energy sector due to subsidies and higher payments. However, the value generated by their use in the energy sector is much lower compared to their use in feed. Our sustainability goal says that we need to increase the use of these products in feed production. So, this is an example where maybe three years down the line we might say, “Okay, our goal is to use more than 80%” and we only end up with 60%. So that’s what the monitor, our monitoring system, will show year by year.
This year and every year after, we will follow these indicators and make the same calculations. However, we hope that our definition of sustainable feed will be adopted across Europe. Because we think it is valuable to show all our stakeholders what we are doing to achieve sustainability in animal feed and what impact different market choices have.
