Next year for the first time ever, global feed production is expected to contract. Vice President Aidan Connolly of Alltech, an international animal health and nutrition company, presented the prediction to the Food and Agriculture Organization of the United Nations in mid-October.
Last year, the Lexington, Ky.-based company's feed production survey showed China surpassed the United States as the world’s largest producer of feed. This year’s survey, which be released in late 2012 or early 2013, covers 130 countries and will show that global feed production grew this year.
For 2013, though, Connolly predicts a contraction of 3-5 percent.
"FAO’s concern is feeding the 1 billion people who don’t have enough food to eat," Connolly said this week in an interview. "Our offices expect an overall reduction in consumption of food next year, which will have a direct impact on production of feed."
A weak global economy is depressing protein consumption.
"It’s a function of meat, milk and egg consumption," Connolly said.
The continued use of feedstocks and materials for biofuels will also cut into feed production next year. The European Union, United States and Brazil will continue to use a large portion of their feed crops for biofuels, and China and Russia are also considering converting feed into biofuels. The renewable fuel standard in the United States, which mandates that gasoline be blended with ethanol, is an ongoing concern to the feed industry.
"It has caused a lot of problems for feed prices in general," Connolly said.
The feed industry, though, argues that byproducts of biofuel industries, such as distillers’ grains, make up for the loss of raw product.
The U.S. drought will play a significant role in next year’s reduced feed supply. Alltech also conducted a survey that looked at the level of 37 mycotoxins in 97 U.S. feed, grain and forage samples. Connolly said that mycotoxins will be a major issue for the U.S. feed industry for the next year.
The mycotoxin survey showed that 100% of the samples tested contained one or more mycotoxins. Fumonisins and DON-group mycotoxins were the predominant mycotoxins followed by the T-2 toxin group, zearalenone and silage mycotoxins. Nearly half, 48 percent, of the samples had two to five mycotoxins, while 44% had between six and 10.
At low levels, a single mycotoxin might not be a cause for concern where animal health and productivity are concerned. But if feed is contaminated with several mycotoxins, they can reduce productivity and compromise animal health.
The challenge for the world’s agricultural producers and food manufacturers in 2013 will be whether they can pass the additional cost of a reduced feed supply to consumers without severely reducing world demand for proteins.
"We are facing a completely new era for the agriculture industry, where for the first time in history, feed production for 2013 will be lower than for 2012, and it is clear that efficiency in converting feed into food will be more critical to food companies than ever," Connolly said.