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World compound feed production by species

Cattle feed production lags behind industry’s otherwise steady growth

Outside Asia, consumer demand continues shift away from beef and dairy

While the animal feed industry in general has enjoyed steady growth, feed for beef and dairy cattle has lagged behind the rest of the industry while producers struggle with shifting consumer preferences.

Feed production for beef cattle remained stagnant in 2018, according to the 2019 Alltech Global Feed Survey, due in large part to decreased demand for beef. Growing consumer interest in non-dairy milk alternatives has resulted in low milk prices, but dairy feed production grew 3%.

Asia, and particularly Southeast Asia, has remained a bright spot for cattle production. A growing middle class in India in particular has driven up demand for eggs, meat and milk, resulting in an 8% increase in feed production in that region. Small ruminant — sheep and goat — production is also rising as a result of increasing wealth in this part of the world.

However, overall production in the Asia-Pacific region dropped sufficiently to allow Latin America to take its place as the third-largest producer of ruminant feed. The U.S. continues to lead beef production, but most growth is fueled by exports to Japan, South Korea and Mexico.

The outbreak of African swine fever in China may present further opportunity for beef producers, though so far most of the supply imbalance has shifted toward poultry rather than beef, which tends to be more costly.

Interest in the research and development of new animal feed products for ruminants, particularly for dairy cattle, has also declined, with more innovators and startups pursuing projects for poultry and swine, according to Robbie Walker, a European business development officer for Alltech.

Although global protein consumption has increased, alternative proteins are also gaining ground with consumers. While Mark Lyons, president and CEO of Alltech, said he doesn’t expect these alternatives to truly emerge in the market until after 2020, he said the feed industry and agriculture as a whole must continue to engage with consumers and find a means of satisfying growing demand for more diverse protein options.

“Consumers are looking for a broader array of food options and therefore our agricultural system will need to be more responsive and agile in order to successfully address these challenges,” he said.