Future of Feed Industry Outlook

[50 Pages Report] The feed industry is continuously evolving, with new technologies attracting increasing attention. These changes emphasize improved efficiency and cost-effectiveness, showcasing a shift towards innovation, sustainability, and technology integration. The industry is expanding and is prepared to invest more in technology-based innovations, with a particular focus on AI/ML-based precision nutrition, feeding systems, and animal nutrition management. Feed formulation is continually being enhanced with a focus on sustainability due to consumer demand. Black soldier fly larvae, mealworms, and crickets are widely cultivated due to their high protein content and minimal environmental footprint. These insects are rich in essential amino acids and require significantly less land, water, and feed than traditional livestock protein sources.

The 2021 WWF Report, ‘The Future of Feed: A WWF Roadmap to Accelerating Insect Protein in UK Feeds,’ projected that the total demand for insect meal from the UK’s pig, poultry, and salmon sectors could reach 540,000 tonnes a year by 2050, with around 240,000 tonnes of insect meal per year potentially sourced from UK insect farms. Seven insect species are now authorized in the EU as processed animal protein in livestock feed. The larvae of the black soldier fly (Hermetia illucens) have proven to be ideal for the production of animal feed, with protein content comparable to soya bean meal — 40 to 47% in dry matter.

Recent developments in biotechnology have resulted in the creation of cultured microbial feed. These single-cell proteins, produced through fermentation processes, are increasingly used as a supplement in animal diets. They are derived from microorganisms such as yeast, algae, and bacteria, offering a sustainable alternative to fishmeal and soybean meal. The most demanded forms of these ingredients are powdered ingredients that can be easily integrated into liquid and solid animal feed while also addressing formulation constraints. The ingredient's innate stability makes it resistant to environmental variations, ensuring longevity and performance.

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Future of Feed Industry Outlook: Market Dynamics

Drivers: Increasing focus on reducing greenhouse gas emissions from livestock

Based on the OECD-FAO Agriculture Outlook for 2021–2030, it is projected that emissions from the meat sector will increase by 5% by 2030. This increase is due to a shift towards poultry production, national low-carbon emission initiatives, and improved productivity, which results in higher meat output from the same number of animals. The adoption of new technologies, such as feed supplements and seaweed, is expected to further reduce future per-unit emissions. The most significant growth in meat-related greenhouse gas emissions is anticipated to occur in Africa. Efforts to mitigate these emissions could involve implementing specific regulations and adopting technologies and production systems that reduce the sector's greenhouse gas footprint. There is a growing demand for feed formulations that help to reduce methane emissions and other greenhouse gases from livestock. This demand could drive research and development of feed additives, such as seaweed and other supplements known to reduce emissions.

Restraints:Integration of new technologies into existing feed production systems creates compatibility issues

Integrating new technologies into existing feed production systems often faces compatibility challenges. Many facilities depend on outdated or legacy systems that may not work well with modern technological solutions. This mismatch can cause issues with integrating data and coordinating processes. To achieve seamless integration, significant adjustments or even full upgrades to existing infrastructure may be needed, which requires both time and financial investment.

Challenges: Feed producers have been dealing with supply chain disruptions and high ingredient prices

According to the Global Animal Protein Outlook 2022 report by Rabobank, it is expected that feed prices will stabilize, but margins will remain tight throughout the year. In North America, feed prices are projected to stay higher than in the past five years, with export levels expected to be the second highest on record. A recent report by Purdue University estimated that corn/soy-based swine feed diets in 2022 will cost approximately 3% to 5% more than in 2021. Feed producers are adapting by implementing cost-effective formulation strategies to manage these price increases. The industry is also facing limited ingredient availability due to pandemic-driven supply chain disruptions. Similar to responses during short-term ingredient shortages caused by natural events or manufacturing issues, feed producers are making adjustments to rations.

Opportunities: Embracing technologies like AI, IoT, and blockchain to enhance feed quality and operational efficiency

The integration of artificial intelligence (AI) and machine learning (ML) is revolutionizing animal nutrition by analyzing extensive data from sensors and other sources. AI algorithms optimize feed formulations based on factors such as species, age, weight, production stage, and environmental conditions. Similarly, ML models can predict poultry growth rates, enabling precise adjustments to feeding schedules and quantities to achieve optimal weight targets. Ongoing research by researchers at Georgia University involves using machine learning to decode vocalizations and identify signs of distress. AI monitoring also tracks poultry weight growth patterns, enabling farmers to identify unhealthy livestock. To address the drastic decline in bee populations, AI sensors like Bectiome, created by Beewon Technologies Ltd, use precision robotics, computer vision, and AI for continuous hive monitoring. This technology allows bee farmers to monitor hives and care for their bees effectively.

Several unconventional trends are reshaping the animal feed industry's landscape. Beyond the typical focus on efficiency and cost-effectiveness, these emerging patterns highlight a shift toward innovation, sustainability, and technology integration.

• Feed formulations increasingly incorporate functional additives with medicinal properties. These include probiotics, prebiotics, and phytogenics (plant-based additives) that promote gut health, enhance immune function, and reduce the need for antibiotics. This trend aligns with the growing demand for antibiotic-free meat and dairy products.
• Recently, there has been a growing interest in alternative protein sources for animal nutrition due to concerns about sustainability, environmental conservation, and efficiency. Insects are gaining attention as a sustainable and nutritious option for animal feed. Protix, a company based in the Netherlands, is a leading producer of insect protein. The company specializes in cultivating Black Soldier Fly Larvae (BSFL), which are highly rich in protein and essential nutrients. Protix supplies insect-based feed ingredients for the poultry, aquaculture, and pet food industries.
• Feed companies increasingly support regenerative agriculture practices, aiming to improve soil health, biodiversity, and ecosystem resilience. These companies are sourcing feed ingredients from farms that adopt regenerative practices, helping with carbon sequestration, water conservation, and increasing farm profitability. In 2023, General Mills gained attention for its commitment to regenerative agriculture and has partnered with other multinational companies like Walmart to further its initiatives. Furthermore, major companies such as Cargill and ADM have also pledged significant support for regenerative agriculture.
• Integration of blockchain technology in the feed industry ensures transparency and traceability of the supply chain. The integration of robotics and automated systems plays a pivotal role in meeting the growing demand for mass-produced feed items.
• There will be significant advancements in biotechnology and nutritional science, driving the creation of feed tailored to meet the specific nutrition needs of individual livestock. Artificial Intelligence (AI) and the Internet of Things (IoT) are revolutionizing feed formulation and distribution. Farmers are using AI-powered platforms to analyze data from IoT sensors placed in feed storage and animal habitats. These platforms optimize feed composition in real-time, ensuring that animals receive precise nutrient profiles tailored to their growth stages and health conditions. This results in enhanced productivity and reduced waste.
• More alternative protein sources will appear in the animal feed market, some of which are in the process of research and development. The most expected alternative protein source is algae, which is highly efficient in converting sunlight and CO2 into proteins and other valuable nutrients.
• The continued emphasis on AI-driven supply chain management, robotics, and augmented reality will shape the food manufacturing landscape. Precision nutrition and nanoencapsulation will also become more prominent, driving innovation for sustainable feed production.
• In 2024, there are ongoing innovations in feed ingredients. Alternative sources such as seaweed and food waste are gaining popularity due to their nutritional benefits and environmental sustainability. For example, Ocean Harvest Technology is concentrating on creating seaweed-based animal feed additives that enhance animal health and reduce methane emissions from livestock.
• The development of innovative feed solutions and sustainability practices is being accelerated through collaborative research initiatives between academic institutions, industries, and governments. An example of this collaboration is The Future of Fish Feed (F3) Challenge, a competition aimed at creating alternative feed ingredients for aquaculture to promote industry-wide innovation and sustainability. In May 2024, five prominent international companies participated in the F3 Krill Challenge held by the organization in the US. The F3 Challenge is a global competition that seeks to find viable, sustainable alternatives to fishmeal and fish oil, which are key ingredients in aquafeed. It encourages the use of innovative and eco-friendly feed ingredients.

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