5 Key Developments Impacting the Global Animal Feed Supply Market in 2020

Animal feed supply

The COVID-19 pandemic has been impacting numerous industries around the world, and the animal feed market is no exception. Farmers are stocking up in case the animal feed supply dries up in the future, leading to shortages in many different countries. Other industries are helping contribute to the market, however, as unsold food and drink that has passed its expiration date is being converted into animal feed. Meanwhile, researchers and entrepreneurs are creating new types of food to help meet demand and improve environmental impacts.

Global animal feed market outlook

Overall, the global animal feed market is healthy, with Technavio predicting a CAGR of about 4% between 2020 and 2024. This growth rate may be impacted by the challenges that come from the coronavirus, but in general the market can expect to see an increase of around $90 billion over the next few years. The current increase in demand will benefit producers’ bottom lines, but the challenges of working while maintaining physical distancing and keeping facilities sanitized could result in lower animal feed supply levels and therefore fewer sales.

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Stockpiling, reduced production, and delivery delays cause shortages

Farmers around the world are buying extra stores of animal feed amid concerns that COVID-19 could disrupt their supply chains and leave them unable to feed their livestock. Along with the risk of animal feed suppliers slowing their production or closing altogether, farmers are concerned they may need to slow or stop slaughterhouse operations and keep their animals for longer due to lower demand, requiring them to use more food than usual. Even delivery trucks can be harder to come by, prioritizing other products and industries. Reduced gasoline demand is also impacting the animal feed supply: distillers grains are a byproduct of ethanol production and a key ingredient of cattle feed.

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All of these factors have led to livestock farms building up two-week supplies of feed when normally they might only keep enough for one or two days. Cargill, for example, has seen a 10% increase in global feed sales, starting in China but spreading to every market the company operates in. The US, Germany, and France are some of the countries that have been experiencing increased demand and shortages.

Because farmers only have so much space to store feed, there is a limit to how much extra they can buy. It’s possible that once buyers have filled their bins to capacity, demand will return to normal levels. However, if too many farms seek to maximize their feed stores, animal feed supply may be impacted for a longer period of time.

FDA provides guidelines to reduce food waste

In light of both the animal feed supply shortage and the decreased demand for restaurants and food suppliers, the US Food and Drug Administration (FDA) has highlighted how companies with surplus food can send it to be used on farms. Businesses such as restaurants, warehouses, grocery stores, and food suppliers are encouraged to donate unadulterated food that is stale or expired, rather than simply throwing it away. Food should be given to people if at all possible, but if something is unsafe for human consumption but suitable for livestock, it can be sent to farmers to help them deal with supply shortages.

Leading brewers plan to convert unsold beer into animal feed

Brewers, pubs, and similar establishments can also contribute to the animal feed industry. Beer that can’t be sold before the end of its shelf life can be evaporated and made into feed. With non-essential businesses closed in many parts of the world, pubs and other places that sell alcohol have been left with barrels and kegs that they can’t sell to customers, and brewers face lower demand because of the closures. Irish pubs, for example, had to close shortly before St. Patrick’s Day and were left with more stock than usual. In response, many large breweries have pledged to take the unused beer back and issue pubs with credit, taking the financial burden on themselves and converting it into animal feed and fertilizer.

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Spent grain feed could reduce methane production

Animal feed made from beer may have other benefits beyond helping alleviate shortages. Research performed by the Flemish Institute for Agricultural, Fisheries and Food Research suggests that feeding cows spent grains from the brewing process can reduce the amount of methane they produce by 11%-13%. While the grains by themselves don’t reduce methane emissions, they are effective when combined with rapeseed meal, which is itself a byproduct of the oil industry. This feed mix could benefit the environment both by decreasing methane emissions on farms and by reducing waste from other industries.

Entrepreneurs develop a new type of animal feed

In Africa, another group is working to improve the animal feed supply. Four students from African Leadership University have formed MagoFarm, a company that breeds insects as an alternative protein source for animal feed. Its product, Magomeal, is made out of dried black soldier fly larvae and can be fed to all monogastric animals. It is 20% cheaper than other animal feed, contains 15% more protein, and can increase the yield of poultry.

MagoFarm’s founders are all proponents of green technology, and their goals are to reduce poverty, hunger, and climate change. Africa’s population is expected to more than double in less than 40 years, and the continent will need to produce roughly 60% more food in order to sustain itself. By producing a sustainable, affordable animal feed supply, MagoFarm aims to help poultry farmers grow and achieve stability and equality.

The global animal feed market is facing both challenges and opportunities that will impact its growth over the next several years. COVID-19 is causing uncertainty for both manufacturers and customers, but new research is bringing innovations and improvements to the industry that will help it grow over the long term.

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