Jun 19, 2020
Covid-19 Impact on Feed Additives in the Agriculture and Feed Animal Feed Industry
- Agriculture And Animal Feed
- Jun 19, 2020
The coronavirus disease (COVID-19) pandemic outbreak is rising high and inflicting human life worldwide. Saving lives is demanding lockdowns, isolation, and widespread closures to slow down the spread of the virus. The coronavirus disease crisis is impacting on global economic activities.
Since feed plays a major role in the production of different livestock animals, feed additives act as a key ingredient in the production of nutrition enriched feed. This nutritional based feed helps livestock in their health management, reproduction, lactation, and brand equity.
Due to the pandemic and lockdown, the supply chain of the raw ingredient has impacted the consumption and production patterns worldwide. Animals cannot get enough nutrition from regular feed hence the feed additives are added in their regular meal containing vitamins, fatty acids, amino acids, and trace minerals.
The COVID-19 outbreak from December 2019 have impacted more than 100 countries across globe and significantly impacted the compound feed and additives market in 2020.
The pandemic have affected the overall animal nutrition in three different ways considering:
- The demand of the meat products
- The production of feed
- The supply chain market disruption
- The financial impact on feed vendors
According to the industrial sources, the prices of the feed have been largely declined and fallen up to 30% since the lockdown. The decline in the demand of the feed pattern will take large duration to improve and may further bring the lockdown again and the market scene will decrease the demand of animal feed.
The European Feed Manufacturers Federation (EFMF) have stated that the demand of the poultry feed have show a decline in the production.
In European countries, the production rate of poultry feed have fallen up to 10% and are expected to fall up to 5.2% more. The declination in the production of feed has been determined due to the import of poultry products from third party of countries. Whereas, in pig feed demand have been expected to fall up to 2.3% and cattle feed production up to 4.1% in 2020.
The overall production of compound feed production is expected to decline by 3% to 6% in 2020.
SUPPLY CHAIN DISRUPTIONS
COVID-19 has printed a negative impact on global economic outlook in the first quarter of 2020. The immediate animal nutrition industry suffers from major supply chain disruption. The pandemic have affected countries such as Italy, Spain, France, China and other key countries and down chain supplier region and feed sector struggling to meet the demand.
This is evident for the lack of supply of micro ingredients such as amino acids, minerals and vitamins. For instance, in March, one of the prominent vendor of feed market Evonik have forced majeure to fulfill the need of the amino acid especially threonine amino acid. The product of Evonik is manufactured by contract manufacturers in China and facing the issue in the procurement of threonine due to shut down of the city.
“Regrettably, we are facing a supply shortage for ThreAMINO,” “We have been informed by our contract manufacturers that they are facing significant restrictions in terms of production and supply chain due to COVID-19.”
- Dr Emmanuel Auer, Head of Animal Nutrition Business Line at Evonik
DEMAND OF THE MEAT PRODUCTS
Due to the lockdown, the supply chain imbalance has risen and this ultimately has impacted the consumption pattern globally.
According to the U.S. Department of Agriculture, the global chicken meat trade has fallen by 4.0% to 11.70 million tonnes on the downward revisions for all major exporters except Brazil. Due to this, the global chicken meat trade will get shrink by 1.0% from the last year.
The below table shows the consumption pattern of meat regionally or country wise:
CONSUMPTION OF MEAT (2018-2020)
|Country / Region||2018||2019||2020 (January)||2020 (April)|
From the above table, it is clearly visible that COVID-19 not only has impacted the production of meat in countries but also the consumption pattern.
INDUSTRY EVENT CANCELLATIONS
Due to the pandemic, the animal nutritional conference and the trade show have been postponed or cancelled until the further notice provided by regulatory authorities.
- American Feed Industry Association (AFIA) has cancelled their conference of Purchasing & Ingredients Suppliers Conference (PISC) which was supposed to hold in March 2020. Animal Health & Nutrition Conference held by Victam in Bangkok will be held in July and the U.S. Poultry and Egg Association (U.S. POULTRY) have been postponed.
With this uncertainty caused by COVID-19, the regulatory bodies have taken initiatives to start their conference on digital platform.
- Alltech one of the key player converted its annual ONE Ideas Conference to a virtual format.
The feed industry faces rapid loss in the demand and production of livestock, feed and supply chain, whereas the protein extracted from corn have been one of the major opportunity as the cost of corn have been lower and making an opportunity for compound feed producers.
FEED ADDITIVES SECTOR: PERSPECTIVE & INITIATIVES
As coronavirus outbreak has impacted the market badly, numbers of organization have taken certain initiatives to provide their products in market.
“Our driving concern is the health and safety of our employees and their families. We have implemented measures to reduce COVID-19 risk to our customers, our employees and their families, while doing all we can continue product supply to our customers.
We are doing everything possible to continue the supply of Phibro products to our customers in every market, while adhering to strict safety and quality protocols. We have increased our stock of raw materials and finished products to help ensure continuous supply. We are in constant contact with our logistics partners to secure timely shipments to customers.
We are requiring our employees to work from home, where possible. For those who need to work at our facilities, they are maintaining social distancing, and where possible, working in shifts. Our sales and technical service staff are staying engaged with customers to service their needs through digital channels as much as possible.
All employees involved in production or logistics who must work on-site are adhering to strict hygiene protocols and social distancing, and where possible we have implemented split shifts to reduce employee contact. We have also implemented increased biosecurity protocols for freight carriers who deliver and collect goods at our facilities.”
- Phibro Animal Health
“As a global manufacturer, we operate in more than 90 countries on six continents, with manufacturing facilities in places like China, Italy and Singapore – countries that have been severely impacted by COVID-19. Kemin remains committed to ensuring the same level of supply assurance as you are accustomed to. This type of incident is an anticipated scenario in our global end-to-end Supply Chain risk management strategy. We have prohibited all non-essential international and domestic travel for all our global employees. We are utilizing digital meetings and telecommunications to conduct business, and we are minimizing meetings with external parties to only those absolutely necessary.”
- Kemin Industries, Inc.
“We are making location-based decisions on work-from-home policies based on individual situations, local regulations and health official recommendations. We have business continuity plans in place for various scenarios and are prepared to respond if we see potential impacts on our business operations. We are closely monitoring the situation and are communicating regularly with our employees and customers through various channels as the situation continues to evolve.”
- ADM Animal Nutrition
Barentz International enters in acquisition with pet food ingredient supplier Chicago-based Ingredients Inc.
“This is a promising new route, from which both parties will immediately benefit from each other’s strengths.”
- Jim Stewart, Founder and Managing Director of Ingredients Inc.
“We have already implemented strict precautionary actions over and above our standard procedures and protocols. These measures, in line with the guidance of national governments and international advisories, including limiting travel to certain areas, encouraging working from home near outbreak areas, and reiterating good hygiene practices for everyone. We have a dedicated team monitoring the situation, liaising with relevant organizations, and anticipating possible future developments to keep our people informed and safe.”
“Due to the fact that the force majeure event is based on a combination of production and supply issue, we are not able to predict by when we can lift force majeure on ThreAMINO.”
- Jurgen Krauter, Head of Communication, Evonik
COVID-19 pandemic has taken a toll on the global population and economy. A collaborative effort on government, public health departments, and hospital fraternity to fight the coronavirus has led to economic slowdowns, global lockdowns, and extreme public safety measures. The public health measures include creating awareness about home quarantine measuring, maintaining food and healthcare supply, especially to the poor are being strictly followed by government across the world. Along with the food and healthcare industry, the feed industry is facing problems due to the non-working manufacturing industry. The demand for feed for livestock is high as the maintenance of livestock is an important aspect for breeders. This has increased the reliability on plain feed for animals without the addition of the nutritive value of the feed resulting in a loss in the business. The livestock industry has affected due to pandemic situations which in turn affected the feed additive industry as a result of reduced demand from breeders. Moreover, the poultry industry was battling with the rumors of the spread of COVID-19 through consumption of meat which impacted the market for poultry that affected the feed market in turn hampering the demand for feed additives. However, with the awareness and true information floating on various websites is expected to drive this market globally. Most of the manufacturers have started selling their products on online websites which are estimated to drive the market for online delivery sites and thus, manufacturers of feed additives.