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ADVANCEMENTS IN TECHNOLOGY AND RISING AWARENESS TO CREATE DEMAND FOR FEED PREMIX PRODUCTS

01 August 20219 min reading

marketsandmarkets research

Feed premixes consist of necessary growth factors added as supplements with a concentrate feed to provide a wholesome nutritional diet for animals. The increasing demand and consumption of livestock-based products such as dairy & dairy-based products, meat, and eggs are expected to drive the usage of feed additives and premixes for the growth and development of farm animals.

The need to increase food production for domestic consumption as well as for export to developing countries has led to an increased demand for agricultural inputs and feed rations. The increasing trend of meat consumption in the Asia Pacific region has led to the rise in the production of feed premixes. It is important to maintain the quality of feed in the food chain as it can further affect the products obtained from the livestock population.

Feed premixes consist of necessary growth factors added as supplements with a concentrate feed to provide a wholesome nutritional diet for animals. Owing to the recent disease outbreaks, ingredients in feed premixes have come under focus to strengthen the immunity of livestock. With advancements in technology and rising awareness among farmers, the emerging markets are obtaining more localized premix products and services. The increasing demand and consumption of livestock-based products such as dairy & dairy-based products, meat, and eggs are expected to drive the usage of feed additives and premixes for the growth and development of farm animals. According to FAO data, it has been stated that the global meat production is projected to be 16% higher by 2025. Factors such as the increasing cost of feed ingredients and stringent regulatory environment concerning feed ingredients and additives are projected to be some of the major restraints for the growth of the feed premix market.

Increasing feed production to drive the feed premix market

The global feed production has increased consistently in the recent past, driven primarily by demand-side factors, including an increase in livestock production and consumption, and the resultant population. Other factors that impact the volume of feed production include the increasing commercialization of livestock rearing practices, particularly in developing economies. According to the 2018 Alltech Feed Survey, China, India, Brazil, the US, Spain, Russia, and Mexico are some of the leading feed-producing countries.

The need to increase food production for domestic consumption as well as for export to developing countries has led to an increased demand for agricultural inputs and feed rations. The increasing trend of meat consumption in the Asia Pacific region has led to the rise in the production of feed premixes. It is important to maintain the quality of feed in the food chain as it can further affect the products obtained from the livestock population.

Feed premixes consist of necessary growth factors added as supplements with a concentrate feed to provide a wholesome nutritional diet for animals. Owing to the recent disease outbreaks, ingredients in feed premixes have come under focus to strengthen the immunity of livestock. With advancements in technology and rising awareness among farmers, the emerging markets are obtaining more localized premix products and services.

The increasing demand and consumption of livestock-based products such as dairy & dairy-based products, meat, and eggs are expected to drive the usage of feed additives and premixes for the growth and development of farm animals. According to FAO data, it has been stated that the global meat production is projected to be 16% higher by 2025. Factors such as the increasing cost of feed ingredients and stringent regulatory environment concerning feed ingredients and additives are projected to be some of the major restraints for the growth of the feed premix market.

Increasing feed production to drive the feed premix market

The global feed production has increased consistently in the recent past, driven primarily by demand-side factors, including an increase in livestock production and consumption, and the resultant population. Other factors that impact the volume of feed production include the increasing commercialization of livestock rearing practices, particularly in developing economies. According to the 2018 Alltech Feed Survey, China, India, Brazil, the US, Spain, Russia, and Mexico are some of the leading feed-producing countries.

Growing focus on livestock and their welfare to drive the market growth

According to MarketsandMarkets analysis, the global market for feed premixes is projected to reach USD 32.8 billion by 2026, recording a CAGR of 6.2%.

Figure 2: Attractive opportunities in the feed premix market / Source: Expert Interviews, Government Authorities, Related Research Publications, Government Publications, and MarketsandMarkets Analysis

The growth of this market is also attributed to the growing focus on livestock and their welfare, which, in turn, is driven by the global increase in the demand for meat and poultry products, rise in global feed production with improved technologies, and increasing standardization of meat products due to contamination from bacteria such as Salmonella, Campylobacter jejuni, Yersinia enterocolitica, Clostridium perfringens, and Staphylococcus aureus. The growth of the market is restricted due to stringent regulations in regions such as Europe and price volatile raw materials of different feed premixes.

Impact of COVID-19 on meat production and animal health sector

The feed market is witnessing sluggish growth due to the impact of the COVID-19 pandemic. Livestock farmers and animal breeders are facing challenges at various levels, such as trade barriers, lockdowns, and shipment delays. Although meat production, on the whole, remains a well-regulated sector, there has been a renewed interest in animal hygiene and biosecurity practices due to the ongoing pandemic. Various organized retailers have increasingly invested in streamlining back-end practices, including the introduction of hygienic meat production and processing practices; sanitation measures for floor-level workers of the meat industry; training and educating butchers regarding clean meat production practices; and assuring that the quality standards are being adhered to.

Asia Pacific is projected to record the highest CAGR during the forecast period

The Asia Pacific region accounted for the largest share of the feed premixes market in 2020. This market is also projected to grow at the highest CAGR during the forecast period. Increased awareness among consumers about quality meat and increased meat consumption across the globe are expected to provide more scope for market expansion. The increasing consumption of quality livestock-based products has subsequently led to the increasing demand for feed and the increased awareness about the importance of quality feed among livestock producers and feed buyers.

Key players the feed premix market

The practice of selective breeding in the South American region is also contributing to the demand for feed premixes in South American countries. The population of developing countries in the Asia Pacific region—such as India, China, Indonesia, Vietnam, and Thailand—are expected to consume meat at an annual rate of 2.4% till 2030, according to the FAO report on “World Agriculture: Towards 2015/2030.” This has increased the demand for high-quality feed concentrates and premixes to enhance the meat weight and quality of the animals.

Some of the largest feed premix importing markets are India, US, Kenya, Vietnam, Philippines, and Indonesia. Among others, some of the key feed premix exporting countries are China, US, Singapore, Netherlands, Spain, Thailand, Germany, France, and Italy.

[box type="shadow" align="" class="" width=""]CONCERN FOR ANIMAL HEALTH AND COMPOUND FEED CONSUMPTION TO PROPEL THE DEMAND FOR FEED PREMIXES Growing focus on animal health to prevent disease outbreaks • Avian flu and other diseases fueled the importance of quality premixes • Reduction in economic and livestock loss Growth in feed consumption • Increased meat consumption and quality concerns established the compound feed market • Supplements the growth of the feed premix market Increase in responsiveness for ethical practices to avoid export quality issues • Customers’ need to reduce operational costs and maintain ethical practices for effective livestock value • The shift from on-farm feed preparation to industrial premix manufacturers Source: Expert Interviews, Related Research Publications, and MarketsandMarkets Analysis[/box]

Key players to expand their geographical presence with new premix production plants

Key players in the premix market have sensed this opportunity to start premix production plants in these regions, to meet the growing demand for feed premixes. For instance, DSM (Netherlands) expanded its presence in India by opening an Animal Nutrition & Health premix plant in Jadcherla. Through this, the company expanded its presence in the feed premix market in the country and offered nutrient-rich feed premixes for the livestock.

The feed premix market is a highly consolidated one, with the top 5 players holding about 65% of the market share. Some of the key players in the feed premix market are Koninklijke DSM N.V. (Netherlands), Nutreco N.V. (Netherlands), Cargill (US), Archer Daniels Midland Company (ADM) (US), BEC Feed Solutions (Australia), DLG Group (Denmark), Charoen Pokphand Foods PCL (Thailand), Land O’Lakes (US), AB Agri Ltd. (UK), Phibro Animal Health Corporation (US), KG Group (Lithuania), Devenish Nutrition, LLC. (UK), Lexington Enterprises Pte, Ltd. (Singapore), De Heus Animal Nutrition BV (Netherlands), Megamix LLC (Russia), Agrofeed Ltd. (Greece), Cladan S.A. (Argentina), Kaesler Nutrition GmbH (Germany), Avitech Nutrition Pvt. Ltd. (India), Advanced Animal Nutrition Pty. Ltd. (Australia), Associated British Foods plc (ABF) (UK), Advanced Enzyme Technologies (India), Kemin Industries, Inc. (US), Novus International, Inc. (US), and Alltech Inc (US). These players have adopted acquisitions, mergers, and collaborations as key strategies to increase their customer base and technological capabilities.

[box type="shadow" align="" class="" width=""] FEED PREMIX MARKET: KEY DEALS Nutreco (2020- November) Nutreco announced its investment in Nordic Aqua Partners (NAP). Nordic Aqua Partners announced the successful completion of a private placement of new shares with gross proceeds of approximately EUR 55.1 million. Nordic Aqua Partners would build China’s first fully integrated and commercially viable Recirculating Aquaculture System (RAS) facility. This would strengthen its feed premix business. DSM (Netherlands-2020-October) DSM completed the acquisition of Erber Group (Austria) for an enterprise value of EUR 980 million (USD 1.16 billion). This transaction excludes two smaller units in Erber Group. DSM acquired Erber Group’s Biomin and Romer Labs. Erber Group’s specialty animal nutrition and health business, Biomin, specializes in mycotoxin risk management and gut health performance management, whereas the Romer Labs business focuses on food and feed safety diagnostic solutions. Thus, this would enhance DSM’s animal health & nutrition business in the global market. Nutreco (2019-October) Nutreco completed the acquisition of Cargill’s (US) compound feed business in Portugal. The business is a part of Nanta, Nutreco’s Iberian feed business, in its animal nutrition division, Trouw Nutrition. This deal would strengthen Nanta’s position in Portugal. Source: Expert Interviews, Government Authorities, Related Research Publications, Government Publications, and MarketsandMarkets Analysis[/box]

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