With the number of feed mills expected to halve within a decade, feed sales valued at over US$350 billion, and the feed industry being the major user of corn, feed grains and soy beans, any changes will have a significant impact worldwide.
By Aidan Connolly, vice president, Alltech
The consolidation and intensification of the feed industry has resulted in more tonnes produced from fewer feed mills. In the European Union between 2005 and 2010, for example, the feed mill size has increased from approximately 10,000 tonnes to 50,000 tonnes per feed mill per year, with the number of feed mills shrinking from a level of 10,000 to 2,000. This trend has been mirrored in the US, and even in China where the number of feed mills has dropped from over 15,000 to 10,000. The industrialisation of the feed industry has resulted in an increased specialisation and efficiency of manufacturers and suppliers.
Looking at the feed industry today, it is evident that feed cost is determined by four components, namely the cost of raw materials (approximately 70% of the overall cost of feed), labour costs, energy prices, and depreciation of milling facilities. As feed mills age the depreciation factor is zero but they still require modernisation and reinvestment. Feed mills globally are also embracing automation, even in countries with lower labour costs. There are many reasons for the automation process to be taken, with biosecurity and traceability being the main drivers.
Sketching future states
Innovation in raw materials will provide new types of feed stocks, altering feed formulation. In addition, the dramatic increase in feed cost means that companies must look closely at feed efficiency. This is no longer just important in monogastrics but also in ruminants, where inexpensive feed sources are limited.
Feed companies are intensifying their commitment to sustainability, such as greenhouse gas emissions and environmental impacts as a result of business operations. Food safety also continues to be a serious concern and, as consumers become more selective about what they eat, they begin to ask questions about what the livestock animals are fed or medicated with. Subsequent demands for accountability must ultimately be addressed at all levels of the food chain.
The feed system of the future will be increasingly connected through information technology. These connections - between the farm, feed mill and processing plant - will allow an instantaneous flow of information. By matching availability of feed with demand, it will be possible to increase the efficiency of the livestock industry, while reducing waste.
In the future, technology such as nutrigenomics will be used to identify the effect that nutrition has on gene expression; targeting genes which are involved in the growth rate of animals, disease prevention and meat quality. This will make it possible to recognise anti-nutritional interactions and define feeding strategies that take advantage of natural conditioning processes associated with prenatal and perinatal feed management practices. Similarly, molecular probes, emerging from nutrigenomic approaches, will become standard in understanding the environmental and nutritional stress factors that limit efficient production. These technologies promise to give a new level of precision to effective feed manufacturing and livestock production.
The feed mill itself will become smart. The use of near infrared (NIR) probes will become part of operations and, together with feedback from farms and processing plants, will allow the analysis of incoming raw materials in real-time and the reformulation of diets on a minute-by-minute basis. Additionally, rapid in-vitrodigestion modelling systems will provide new ways of defining the true nutritional value of incoming raw materials, as well as the final feed products. Animal processing plants have become smarter by having RFID tags on animals, ensuring full traceability and collection of information from those animals. This will eventually allow processing plants to sort animals by weight and potentially even quality, further improving plant efficiencies.
Above all, feed digestibility and feed conversion are the most important given the recent feed price surge – as the value of each point of feed conversion has become so significant, any ingredient which can improve feed conversion must be considered. The use of novel raw materials in feed preparation will also be critical. This will lead to the growing use of solid state fermentation (SSF) technology, which is more effective than anything achieved through traditional enzyme systems. Recent trials showed potential savings of up to $40,000 per million broilers in the United States and large benefits also in pigs.
China’s technological advance
Next to rising population, personal income and accelerating urbanisation, Chinese consumers are increasingly conscious about food quality and safety. To produce safe food, feed producers are required to ensure traceability, quality and biosecurity. By applying modern technologies China can lift up the safety and quality standards to the global advanced level. The competition among Chinese feed companies is moving away from products to supply chain, as well as away from physical products to solutions. Three people can run a 100,000 tonne feed mill in the technologically advanced countries, whereas a mill of a same size in China has 30-40 production workers today. The feed mills of the future will be fully automated, which can not only reduce cost, but also increase manufacturing accuracy and play a part in biosecurity.
Innovation is high on the agenda for the feed industry, driven by technological advances, improved animal performance, higher expectations of consumers and sustainable sourcing of ingredients. Feed producers are increasingly interested in novel ingredients such as algae, enzymes and waste materials. Technologies targeting enhanced feed efficiency should be embraced, including those developed using nutrigenomics. Among the novel ingredients, algae will begin to play an increasingly important role in feed formulation, soon becoming a major source of nutritionally rich biomass; in particular as a source of protein, oils, pigments, vitamins and starch. Today, it represents a valuable source of DHA as well as a sustainable form of protein production.
The requirement for safe food must originate with safe feed. Today, feed may contain many hazards, including heavy metals such as arsenic, lead, and cadmium. Additionally, dangerous levels of dioxin, PCBs and mycotoxins are entering the food chain through animal feeds. Some of these contaminants can occur from natural causes, such as volcanic eruptions and forest fires, but many are formed as by-products of industrial emissions and processes. The presence of PCBs in diets may have deleterious effects on animals and humans, which should be eliminated by product sampling and testing. Quality assurance will remain amongst the highest priority in feed production.
Trust but verify
In the future we will see the importance of automation, but this will be achieved with real-time automated and verification systems, rather than trusting suppliers to be totally honest. ‘Trust but verify’ will be the phrase of the day.
Analytical technology such as NIR, and in-vitro nutritional evaluations will allow us to observe and define nutritional value, and detect contaminants, moving the industry to a new level of food safety. Finally with the expectation of continued record high feed costs, nutritional strategies will emphasise maximising feed conversion and feed digestibility, and a move towards fully embracing ‘precision nutrition’.