World Feed Panorama: Avian flu, oversupply slowing growth

In its 26th year, the World Feed Panorama survey tracks 2016 global compound feed production and compares these volumes against historical data to highlight industry trends.

World compound feeds produced by industrial manufacturers for food animals and aquaculture reached 893.2 million metric tons in 2016, on figures compiled for our latest exclusive World Feed Panorama survey of industry trends. This compares with 884.4 million tons as the global total in 2015 and points to a volume increase of 1.0 percent in 2016.

Despite low grain prices, animal feed production around the world showed signs of slowing down in 2016, due to a number of factors, such as avian influenza in Europe and Asia, market oversupply in Asia, and China’s severe currency devaluation.

2016 Compound Feed Production Trend 1706 World Feed Panorama1

In 2016,  the global compound feed manufacturing industry grew by just 1 percent, a clear sign of a slowdown that looks to continue into 2017. | WATT Global Media

In spite of the slowdown, there’s been close to an 11 percent volume increase in the past 5 years and, over the past 15 years, the tonnage of compound feeds produced worldwide has grown by 42 percent.

Top countries

The World Feed Panorama focuses only on industrially made compounds for feeding farm livestock and aquaculture. It excludes farm-mixed feeds, pet food and horse feed.

2016 World Feed Production Trend 1706 World Feed Panorama2

Even though the growth of world compound feed production has slowed in recent years, compared with 2001, the industry has grown by 42 percent. | WATT Global Media

The dominance of the biggest players was very clear again in 2016. The top 5 countries in the production of compounds last year accounted for 50 percent of the world total. Those countries are, in order, the U.S., China, Brazil, Mexico and India.

The market share for the top 10 countries was 63 percent, for the top 15 it was over 73 percent, and the top 20 represented 81 percent of all tonnage. 

2016 Top Five Compound Feed Volume Trends 1706 World Feed Panorama3

Mexico, the U.S. and Brazil increased compound feed production in 2016, while production fell in China and the EU-28. | WATT Global Media

New players moving up

The U.S. continues to be the largest producer in 2016, as it was in 2015. The People’s Republic of China, which held the top spot until 2015, continues as the second largest compound feed producer. Brazil and Mexico, both in the Latin American region, continue to hold the third and fourth spots, as they have in the past.

It’s in the rest of the top 10 that several changes have taken place, with India jumping to the fifth spot up from ninth, moving past Russia and Germany, which now hold the sixth and seventh positions, respectively. Japan is now eighth, Spain ninth and Canada 10th.  South Korea has moved up to the 13th spot, after it wasn't even in the top 20 before.

2016 Global Compound Feed Market Share 1706 World Feed Panorama4

There was no change in regional market shares in 2016, compared with 2015, with Asia-Pacific accounting for the largest volume of compound feed production. | WATT Global Media

It is important to point out, in evaluating the statistics for the World Feed Panorama, that compound feed production is documented poorly in most countries. In the U.S., tonnage is an estimate because no government agency or industry organization records national production figures from feed company data on an annual basis. For China, there are official reports, but these conflict dramatically from one agency to another, and consistently overstate the market size. 

The countries forming the top 25 represent a mix of large and mature markets and newer contenders. As it has in the past, Asia-Pacific has an important number of fast-rising players, such as India, Thailand, Indonesia, Vietnam, South Korea, Philippines and Australia.

In the Middle East-Africa region, Turkey has seen its output of compounds rise by 55 percent in the past five years on figures supplied by Turkish feed association Türkiyem-Bir.

Smaller markets emerge

One of the advantages of having the unparalleled World Feed Panorama archive as that we can look at the longer-term trend in compound feed production volume by country.

2016 Top 25 Compound Feed Producing Countries 1706 World Feed Panorama5

Nine of the top 25 compound feed-producing countries are in the Asia-Pacific region, demonstrating impressive growth rates compared with the World Feed Panorama’s 2001 and 2011 historical data. | WATT Global Media

In the table, “Top 25 countries’ 2016 compound feed production,” the top performers are ranked by production volume in 2016 and compared with their past performance in the years 2001 and 2011. The comparison with 2001 highlights those countries have at least doubled their production volume in 15 years as well as those that have had only modest growth or even decreases in production.

Comparing the 2016 volume by country with its 2011 figures shows that some of the “smaller” countries have grown the most in the past five years. The trend seems clear: The emerging markets are in Asia-Pacific, while the mature European markets are barely growing or are losing ground.  

Region by region

2016 regional production showed no changes compared with 2015, with Asia-Pacific continuing to be the biggest producer of compound feeds, representing 34 percent of all the compounds produced globally. The combined region of Europe and Russia maintained the second position at 22 percent, just ahead of North America at 21 percent.

2016 Compound Feed Production Market Share 1706 World Feed Panorama6

While the top 5 countries continue to represent 50 percent of total world compound feed production, the top 20 countries have increased their share from 70 percent to 81 percent of total production. | WATT Global Media

Latin America and Middle East-Africa grew in 2016, although their global percentages remained the same as in 2015. Latin America, including top performers Brazil, Mexico and Argentina, accounted for 16 percent of global compound feed production. The Middle East-Africa region, with top producers Turkey and South Africa, represented 7 percent of world production.

Species comparison

In the context of the global total of compound feeds produced in 2016, the dominant market, poultry feeds, dropped a small amount from 48 percent in 2015 to 47.5 percent in 2016, due to the impact of avian influenza outbreaks in Europe and Asia at the end of the year.

Pig feeds moved up from 26.5 percent to 27 percent, in part due to poultry’s troubles. Ruminant feeds maintained the 21.5 percent share they held in 2015. While there was growth in the aquafeed sector in 2016, its overall 4 percent share did not change from 2015.

2016 Feed Production By Species 1706 World Feed Panorama7​​​​​​​

Although it lost slightly to the pig sector in 2016, poultry is still by far the largest segment of world compound feed production. ​​​​​​​| WATT Global Media

 

 

 

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