Research show that the demand for animal protein continues to rise around the world, including meat, milk and fish due to the increasing world population. It is thought that this demand will support the growth in the world compound feed market. Because sustainable and efficient livestock production, safe and nutritious animal food production depends on adequate feed sources. According to some recently published reports, the world compound feed market size, which was US$ 521.3 billion in 2022, is anticipated to reach US$ 641.2 billion by 2027 with a CAGR of 4.2%.
By Derya Yildiz
According to estimates compiled by the Food and Agriculture Organization (FAO), by 2050 we will need to produce 60 per cent more food to feed the world population of 9.3 billion. Therefore, animal-based protein production is expected to increase along with this increase. This demand for animal proteins shows that the highly important role of the compound feed sector will also increase. Because the feed industry is the most important element for sustainable growth in animal husbandry and compound feed plays a major role in the global food industry as it ensures safe and nutritious means of animal proteins. Every increase in animal protein production makes it necessary to achieve a significant increase in feed production for sustainable animal production.
According to the market reports, increasing livestock population worldwide, rising widespread of animal diseases, and increased population especially in the developing countries will encourage the growth of the compound feed market in the coming years. In addition to this, increasing demand for good quality dairy and meat products, rapid increase in industrialization and focus of the advancements are other important factors that are anticipated to boost the compound feed market growth. Rapid rise in meat consumption and sudden outbreak of numerous livestock diseases worldwide is forecasted to witness a huge demand and growth in compound feed market over the 2022-2027 projected period.
COMPOUND FEED MARKET GROWTH EXPECTATIONS
According to IFIF, the annual turnover of global commercial feed production exceeded $ 400 billion. More than 130 countries have a share in the production and sales side of this commercial value. But the report titled ‘Compound Feed Market Analysis, Size, Share and Trends’ prepared by MarketsandMarkets points to a higher size. According to the report, the world compound feed market size estimated at US$ 521.3 billion in 2022 and is anticipated to reach US$ 641.2 billion by 2027, with a CAGR of 4.2%, in terms of value during the 2022-2027 forecast period. In addition, other reports point to similar market size and growth potential. For example, according to a report by Introspective Market Research, the global compound feed market was valued at US$ 464.94 billion in 2021, and it is projected to reach US$ 620.11 billion by 2028, registering an estimated CAGR of 4.2% during 2021- 2028.
Major Players:
ADM
Alltech, Inc
Arab Company for Livestock Development (ACOLID)
Arabian Agricultural Services Company (ARASCO)
BRF SA
Cargill, Inc
CP Food – Charoen Pokphand Foods
De Hues Animal Nutrition
East Hope Group
Feed One Co.
ForFarmers
Godrej Agrovet, Ltd
Guangdong Haid Group
Hueber Feeds, LLC
J.D. Heiskell & Co.
JA Zen-Noh
JAPFA
JBS S.A.
Kent Nutrition Group
Land O’ Lakes
Muyuan Foodstuff Co.
New Hope Group
Nutreco N.V
Purina
Royal Agrifirm Group
Shuangbaotai Group
Tyson Foods, Inc.
Wen’s Food Group
Weston Milling Animal Group
Research and Markets explains the highlights of the compound feed market on the basis of different segments like ingredient, source and form in its report titled Global Compound Feed Market as follows;
– Based on ingredients, the cereal segment is estimated to occupy the highest market share during the forecast period. Cereals are whole grains used as a compound feed for different livestock. Among different types of cereals, maize is the commonly used ingredient as 70% of its production is used in making animal feed. The type of feed to be included in compound feed depends on the type of livestock feed manufactured and the cost of raw materials.
– Based on the source, the plant-based segment accounts for the largest market share and it would dominate the market in terms of value during the forecast period. The Plant-based raw materials for compound feed are obtained from plant sources like oils, vegetables, grains, etc. The products manufactured from plant sources are rich in micronutrients which act as a complete nutrient for livestock.
– Based on form, the mash segment accounts for the highest market share in 2022. Mash form of compound feed is a feed available in meal form which is unprocessed and the finest variety of feed available for livestock. The mash feeds are majorly used in the ruminants and layer poultry. Mash diet gives greater unification of growth and it is economical.
– Based on livestock, the poultry segment is estimated to account for the largest market share in the global compound feed market and is projected to grow at a CAGR of 4.3%. The increasing demand for eggs to get optimum vitamins and protein is expected to increase the demand for poultry. Additionally, the rise in awareness regarding appropriate nutrition and care would boost the demand for compound feed in the poultry sector.
COMPOUND FEED PRODUCTION AND GROWTH
According to IFIF’s estimates, world compound feed production has reached over 1 billion tonnes annually. Global commercial feed manufacturing generates an estimated annual turnover of over US $400 billion. Commercial production or sale of manufactured feed products takes place in more than 130 countries. However, this represents the amount produced in the professional feed industry. In addition, it is stated that the amount of feed that is directly mixed and produced in farms reaches 300 million tons.
Agri-Food Outlook 2022 report, prepared by Alltech, provides much more up-to-date data. According to this report, the amount of compound feed production carried out all over the world in 2020 was 1,207.9 million tons. This amount reached 1,235.5 million tons with an increase of 2.3% in 2021.
China, USA, Brazil, India, Mexico, Spain, Russia, Turkey, Japan and Germany are among the top 10 countries in world compound feed production in 2021. Turkey, which was not included in this list in 2020, increased in rank and entered the list of top 10 feed-producing countries in 2021. As a result, Argentina dropped out of the top 10.
The top 10 feed-producing countries around the world, representing 65% of the total world feed production, produced 799.1 million tons of feed. In total, feed production in these countries increased by 4.4% compared to 2.3% global growth.
On a regional basis, Asia-Pacific is the world’s largest feed producer. The region witnessed a 5.5% decline in total feed production due to Africa swine fever in 2019. However, it caught the growth trend again in 2020 and continued to be in the first place on a global scale by producing 433.6 million tons. In 2021, the production in the region reached 458.1 million tons with a record increase of 5.7%. China, which is the largest feed producer in the world and the region, increased its feed production by 8.9% to 261.4 million tons in 2021. In China’s production, pig feed ranks first with 100.1 million tons. This is followed by broiler feeds with 94.4 million tons, layer feeds with 31.5 million tons and aqua feeds with 21.7 million tons. India, the second largest producer in the region, also experienced a 12.2% increase in production and increased its production to 44 million tons. The biggest share in India’s feed production belongs to broiler feeds with 15.8 million tons. This is followed by 12.9 million tons of layer feeds and 12.5 million tons of dairy feeds. In Japan, the third largest producer in the region and the eighth largest producer in the world, 2021 production (28.8 million tons) remained almost the same as the previous year. Layer feed production in the country was 6.3 million tons, pig feed production was 5.6 million tons, broiler feed production was 3.8 million tons.
Europe, which ranked second in world feed production with 266.8 million tons in 2021, experienced a decrease of 1.2% in production compared to the previous year. Spain with 35.5 million tons of production, Russia with 33 million tons of production and Germany with 24.5 million tons of production stand out as the top three countries in Europe. In Spain, pig feed ranks first among all feed groups with a production amount of 18.6 million tons. In dairy feed, beef feed, broiler feed and layer feed, the production is between 2 and 4 million tons. Pig feed is the primary feed group also produced in Russia. In the country, 12.8 million tons of pig feed production is followed by broiler feeds with 10.4 million tons. In Germany, another important country in the region, 9.1 million tons of pig feed production is followed by dairy feeds with 5.2 million tons and broiler feeds with 3.9 million tons.
North America, which ranks third in the world compound feed production with a production of 252.9 million tons, grew by 1.9% in 2021 compared to the previous year. The US, which is the second largest feed producer in the world with a production of 231.5 million tons in 2021, is the leading producer of the region. In the country, around 65.6 million tons of beef feed, around 55.2 million tons of broiler feed, and 48.8 million tons of pig feed were produced.
Latin America grew by 0.5% in 2021 on a regional basis compared to the previous year and produced 178.3 million tons of feed. Brazil, the largest feed producer in the region and the third largest in the world, increased its feed production to 80 million tons in 2021 with an increase of 2.1%. Broiler feed production in the country was 34.6 million tons and pig feed production was 19.3 million tons. Mexico and Argentina follow Brazil in feed production in Latin America. In 2021, Mexico produced 38.8 million tons of feed, while Argentina is estimated to produce around 23 million tons.
Africa was the second region with the highest increase in feed production by 2.4% in 2021. With this increase, the compound feed production of the region, which was 43.2 million tons in 2020, reached 44.2 million tons in 2021. South Africa, Egypt, Nigeria, Morocco and Algeria, as the top five producers of Africa, accounted for more than 75% of regional feed production. Broiler feed, layer feed and dairy feed constitute almost half of the total feed production in the region.
Middle East falls far behind in animal feed production compared to other regions. While 24.7 million tons of feed was produced in the region in 2020, this rate decreased by 0,8% to 24.5 million tons in 2021. Iran and Saudi Arabia stand out as the most important producers in the region.
SHARE OF TYPES IN PRODUCTION
Considering the share of types in world feed production, poultry group seems to be in the first place. In the poultry group; the broiler feed production, which was 343 million tons in 2020, reached 350.9 million tons in 2021 with an increase of 2.3%. Broiler feeds’ share in world feed production is 28.4%. Asia-Pacific region accounts for 148.3 million tons of this production. It is followed by Latin America with 65.9 million tons and by North America with 58.2 million tons.
According to the 2022 Alltech Agri-Food Outlook, a range of factors may have helped boost the broiler business, including an increase in home cooking during the pandemic and being a relatively affordable option compared to other proteins. The opposite effect was seen in the Philippines, however, where production decreased due to COVID-19. China and India accounted for the most significant increases in Asia-Pacific. In Latin America, Peru, Brazil, Paraguay and Mexico contributed significantly to the region’s 5% increase.
Layer feed production, which was around 161 million tons in 2020, decreased by 1.4% to 158.7 million tons in 2021. The largest production region in this group, again, is Asia-Pacific with 75.8 million tons.
According to the 2022 Alltech Agri-Food Outlook, several countries experienced challenges due to the high costs of raw materials, combined with flat or reduced retail prices for eggs. In Europe, the most significant decreases occurred in Norway, Russia, Ukraine and Poland. Asia-Pacific also saw a decrease, while tonnage in Australia grew by 4%.
Pig feeds take the second place in feed production with a share of 25.1%. The Asia-Pacific region stands out again with 138.9 million tons in pig feed production, which was 310.2 million tons globally in 2021. Asia-Pacific region is followed by Europe with 75.2 million tons and by North America with 57.1 million tons in pig feed.
According to the 2022 Alltech Agri-Food Outlook, the pig sector displayed a significant comeback, with a feed tonnage increase of 6.6%, which was primarily boosted by Asia-Pacific’s recovery from ASF. Japan, South Korea, Malaysia and China demonstrated a recovery from ASF, but Indonesia, Myanmar, the Philippines, Thailand and Vietnam continued to feel the impact of the disease. In Europe, countries where ASF is not or is no longer a problem are still impacted by a pork surplus due to a reduced demand from China.
World dairy feed production, which was 130.4 million tons in 2020, reached 132.9 million tons in 2021 with an increase of 1.9%. Europe has the largest share in world dairy feed production with a production of 44.3 million tons in 2021. It is followed by Asia-Pacific with 25.6 million tons. The Asia-Pacific has achieved a very serious increase of 8.6% in dairy feed production in 2021.
According to the 2022 Alltech Agri-Food Outlook, Asia-Pacific recorded the biggest increase, which is mostly attributed to growth in India. As COVID-19 lockdowns eased around the world, the reopening of the hospitality industry and in-person classroom education helped boost milk consumption overall. In Australia and New Zealand, dairy feed tonnages were down 6.7% and 2.5%, respectively.
Beef feed production decreased by 1.9 percent in 2021 compared to the previous year and amounted to 115.4 million tons. North America is the largest producer of beef feed with 66.7 million tons. It is followed by Europe with 16.8 million tons (down 13.7% from the previous year) and Asia-Pacific with 13.7 million tons.
This decline in production is thought to be partly due to challenges incurred through greenhouse gas (GHG) regulations. According to the 2022 Alltech Agri-Food Outlook, European markets are especially focused on reducing GHG emissions in an effort to align with COP26, the EU Green Deal and the FEFAC Feed Sustainability Charter 2030. The U.S. experienced an increased steer and heifer harvest due to carryover from 2020, as well as a record demand for beef exports. Argentina saw a significant reduction due to reduced exports, and high inflation and the devaluation of the local currency are also affecting Argentinians’ purchasing power. Turkey experienced a 15% reduction in tonnage as the result of an increase in the price of raw materials and due to the high cost of importing livestock.
Aqua feeds continue their increasing trend in all regions of the world. The overall increase rate in 2021 is 3.7%. Thanks to this increase, world aqua feed production, which was 49.5 million tons in 2020, reached 51.3 million tons in 2021. The largest regional share in the production of aqua feeds belongs to Asia-Pacific with 37.6 million tons.
According to the 2022 Alltech Agri-Food Outlook, recirculating aquaculture systems (RAS) are becoming more prevalent, and consumer demand for fish is on the rise. Markets with ASF challenges recorded additional growth due to their reduced pork supply. India recorded a significant increase of 9% in its aquaculture feed tonnage; additionally, Indonesia accounted for 10% of Asia-Pacific’s growth. In Latin America, Chile, Brazil, Honduras and Ecuador contributed to the regxional growth of 5.6%.
The biggest increase rate among animal feed types belongs to pet feeds with 8.2%. World pet feed production, which was 31.5 million tons in 2020, reached 34.1 million tons in 2021 with this increase. Europe is the largest producer on a regional basis with a production amount of 11.5 million tons. It is followed by North America with 10.6 million tons and Latin America with 7.1 million tons.
According to the 2022 Alltech Agri-Food Outlook, this significant increase in the world pet feed production is largely due to the rise in pet ownership amid the COVID-19 pandemic. While some regions remained flat, there were no reported decreases in any region around the world.
References:
1. 2022 Alltech Agri-Food Outlook, https://www.alltech.com/agri-food-outlook
2. Alltech Global Feed Survey 2021, https://one.alltech.com/2021-global-feed-survey/
3. Feeding the World Sustainably; José Graziano Da Silva, Director-General of the Food and Agriculture Organization of the United Nations; https://www.un.org/en/chronicle/article/feeding-world-sustainably
4. Food and Agriculture Organization of the United Nations (FAO), http://www.fao.org/
5. International Feed Industry Federation (IFIF), https://ifif.org/
6. Introspective Market Research; Compound Feed Market, 2022-2028; Published on: August 2022; https://introspectivemarketresearch.com/reports/compound-feed-market/
7. MarketsandMarkets; Compound Feed Market Analysis, Size, Share and Trends; Published on Jun, 2022; https://www.marketsandmarkets.com/Market-Reports/compound-feed-market-12564156.html
8. Research and Markets;Global Compound Feed Market; June 2022; https://www.researchandmarkets.com/reports/5610709/global-compound-feed-market-by-ingredient
