The Indian feed industry is expected to grow tremendously in the future and become one of the leading feed manufacturers and exporters across the globe. However, the industry needs to explore and exploit the huge sources of growth by taking adequate measures and overcoming the challenges it currently faces.
Research Analyst- Food, Beverage & Agriculture
Feed, which is produced in more than 130 countries, forms an important sector. Various species are found and reared in these regions for deriving milk, meat, protein, and other products. It accounts for a major component of the animal rearing process as it adds a significant cost to the production system. Feed requirements vary across regions as per the animal population and their economic importance in the region. The feed industry contributes significantly to the well-being of millions of people globally, in terms of economic and nutritional factors. Factors such as the rising consumption of animal meat, growing demand for other livestock products, and an increase in oilseed production contribute to the growth of the global feed industry.
The Asia Pacific region dominates the feed industry globally due to the presence of a large number of feed mills in the region. India is one of the largest and fastest-growing feed markets in the world. According to the Alltech Global Feed Survey Summary, India is among the top 10 countries producing feed across the globe. Feed manufacturing on a commercial and scientific basis was initiated around 1965, with the main objective of catering to the needs of dairy cattle. The Indian feed industry has evolved and developed over the years. Currently, poultry, aqua, and dairy account for a major share of the overall feed demand.
The poultry industry in India has grown tremendously over the years. India’s poultry sector has been one of the fastest-growing segments of Indian agriculture. In the last decade, from 2002 to around 2013, the Indian poultry industry has grown at an annual growth rate of 8%. In the last few years, poultry consumption witnessed steady growth. According to government data, egg production increased from 95 billion in 2017-18 to 114 billion in 2019-20. Factors associated with the growth of poultry consumption include the rising household incomes and increase in animal-based protein intake.
The production of aquaculture has also witnessed a growth of around 6%. Seafood production in the country has grown 4% from 2002 to 2003. Rapid changes in the fish farming sector have contributed to increasing capacities for modern feed. Along with this, the Indian dairy industry has been growing at a rate of 4% annually. Growth in these sectors of the economy has resulted in the increasing demand for feed in the country.
Composition of typical feed meal
In general, the raw materials used as ingredients for preparing feed include maize, wheat, bajra, soybean, sugarcane, oilseeds and rice bran, oil cakes, sunflower meal, cottonseed cake, wheat bran, and some non-vegetarian sources. Corn is one of the major sources of energy in poultry feed.
• In the North, poultry feed is corn (60%) + soybean (25%), and the rest of farm gate wastages such as rice/ wheat/meat meal
• In the East, it is corn (60%) and a mix of rice/ sorghum, etc.
• In the West, poultry meal is a mix of corn + soybean
• In the South, poultry feed is corn (65%) + soybean (30%), and the rest are oil, groundnut, sunflower residues, and fish meal
Challenges of the Indian feed industry
• One of the most common challenges faced by poultry, cattle, and seafood segments is the frequent and common disease outbreaks. According to the Alltech Global Feed Survey, India suffers from disease-impacted poultry.
• Due to deficiency in quality feed and fodder, animals are not getting their required nutrients, resulting in lower production of meat or milk. In response to this challenge, the idea of balanced feeding and compound feed is being introduced in the industry.
• One of the biggest challenges for the feed industry is the rising cost of feed, which can account for up to 70% of the total production expenses. Scientific innovation is a critical factor for the future of animal nutrition.
• Dependence on monsoons leads to fluctuations in feed supply, resulting in volatility in feed prices.
• Hedging capability is limited due to capital and feed storage constraints in the country.
Impact of COVID-19 on the Indian feed industry
Due to the COVID-19 pandemic, the demand for basic food or essentials increased tremendously across the globe. Despite the strong demand for meat, dairy, and aquaculture products amidst the coronavirus pandemic, the supply chain witnessed a host of disruptions, restraining producers from providing their products in the market.
Poultry farmers in the country were reluctant to raise birds due to huge losses incurred due to the lockdown. Indian poultry feed manufacturing sites incurred huge losses due to decreased demand. During the COVID-19 crisis, the USD 16 billion poultry feed industry witnessed a drop of USD 2 billion. It was operating at around 50% capacity, also impacting the prices in the country. North Indian states such as Haryana and Punjab have around 200 poultry feed manufacturers. According to them, the outbreak has negatively impacted the Indian poultry sector and also impacted the prices of feed. The feed industry has also been badly affected by the closure of restaurants. There has been a dramatic shift in consumption patterns in light of the pandemic. Poultry production, aquaculture, and beef are some of the worst affected sectors. The decline in these sectors has led to a decrease in the demand for feed as well.