22 May 2019 – In 1999, the European single currency was created by the European Union, NATO began bombing Yugoslavia, and the Y2K hype made people believe that the end of the world was near. It is also widely accepted that the peak of the dot-com bubble (also known as the Internet bubble) occurred in 1999.
A time of extreme growth in the usage and adoption of the Internet, backed up by widespread investor interest, the dot-com economy saw new internet-based companies popping up seemingly every single day. It was within that context that Feedinfo News Service launched, setting out to help subscribers know more about key events and pricing in the feed additives sector.
Feedinfo logo in 2000
But when the dotcom bubble burst in 2000, when venture capital became as rare as a hot English summer and the mentality of investors completely changed, those ideas trading off online hype disappeared, while those which met a real market need with a high performance service endured.
Feedinfo.com is one of those enduring brands.
This is almost certainly due in part to the fundamentals of agriculture and animal production:
– The Earth’s population is expected to grow to 9.8 billion over the next 30 years. That’s a lot of mouths to feed.
– The agriculture sector will never go away: it may be impacted by short-term conditions that can depress the demand of a given sector at times, but the long-term demand will stay intact until – and if – a substitute for food is found.
– Worldwide meat production has tripled over the last four decades and increased 20 percent in just the last 10 years. And based on OECD and FAO projections, meat consumption per capita is set to rise even further, from about 34 kg in 2015 to 49 kg in 2050.
However, Feedinfo’s success is due to more than just a lucky break in the dot-com era underpinned by the strong growth prospects of the underlying market in which it operates.
For 20 years Feedinfo News Service has focussed on improving resiliency for the industry at large, helping companies navigate murky waters by providing transparency and accuracy to an animal nutrition sector always on the lookout for a better public image.
It can be argued that the arrival of Feedinfo News Service in 1999 was a timely one as it came on the heels of the 1999 Belgian dioxin crisis and the lysine price-fixing conspiracy of the mid-1990s – one of the best documented corporate crimes in American history, and one which severely undermined confidence in the actors in this sector, making apparent the need for a more transparent market.
Yes, the bad guys were sent to jail. Truth, justice and the FBI prevailed, but the animal nutrition sector took a serious blow and was in need of reassurance.
Not unlike the beam of light in our company logo, we aim to project our values – truth, trust, integrity, independence, reactivity and accuracy – on the global animal nutrition landscape. Our independent journalists and analysts are committed to providing open and transparent global coverage on a daily basis of the latest current events, market and pricing data, and corporate information pertaining to the animal nutrition and animal health industries. Our customers across the globe and at every link in the animal feed supply chain tell us this has earned us their trust.
Feedinfo logo in 2019
Feedinfo now has customers in more than 60 countries worldwide. And while it began in Toulouse, France, today’s Feedinfo, is an international firm of people spanning offices in France, the UK and the Netherlands, entirely focussed on delivering high value animal nutrition information, pricing and news.
Our feed additive pricing data and commentary over the years has certainly helped contribute towards becoming a globally recognised specialist reference. For several of the ingredient categories, we are now often cited by leading manufacturers and industry decision makers.
In 2000 we started price reporting on the amino acids: lysine, methionine, tryptophan and threonine and vitamins A, E and B2. In more recent years we have expanded to valine and Chinese-origin lysine for amino acids, A, D3, biotin and D-calpan for vitamins, as well as feed phosphates and copper sulphate. This pricing insight allows Feedinfo’s readers to gain a competitive advantage through efficient management of their commodity risks.
Our focus on breaking news, exclusive industry interviews and insights, as well as our coverage of the fundamentals which affect the global animal nutrition and health sectors, help companies understand what is moving the market and what new dynamics might emerge.
Over the 20 years of our existence, globalisation and sector-specific trends have wrought deep transformations in the animal nutrition industry. Diverse corporate strategies have played out, players have consolidated and new ones emerged, amid a backdrop shaped by varying regulatory influences.
Global animal feed production has changed: between 1998 and 2018, worldwide output nearly doubled from an estimated 575 million metric tonnes (MMT) to 1,100 MMT. During this time the US lost its world number 1 ranking (177 MMT in 2018, up 26.4% from 140 MMT in 1998) to China (187.9 MMT in 2018, up 343% from 54.7 MMT in 1998). Brazil grew production by 236% to 68.6 MMT in 2018 from 29 MMT in 1998. During this time France, the EU’s largest producer with 24.1 MMT in 1998 actually reduced production by 11.2% to 21.4 MMT in 2018, with feed production declining since the early 2000s as a result of an ongoing restructuring in the pork, poultry and ruminant sectors.
Whatever the scenario, feed additive producers have to adapt accordingly.
Source: Feed International, 1999
Source: Alltech, Feed Survey, January 2019
Taking vitamins as an example, we have seen how historically base vitamins used to be produced by pharmaceutical companies. However, after patents expired, the production of these vitamins became less profitable, and were considered less core after the anti-cartel investigation by the European Competition Commission in 2001. For instance, this triggered Roche to sell its vitamins business to DSM in 2003.
Meanwhile, with globalisation in full swing, technological barriers to entry decreased and competition from Chinese and Indian producers, boasting lower production costs, increased. This resulted in a substantial level of commercialisation in the production of vitamins, making it challenging for the European producers to remain price competitive, partly given the scale of their production facilities. The development of supply then became erratic, mainly due to volatility in the production levels of Chinese players in view of quality issues or new capacities coming on stream. In certain periods, supply was insufficient to meet demand.
With globalisation we can expect consolidation in our industry to continue and opportunities for niche feed additive markets to grow. And within this picture it will be interesting to look at how the interaction between private and public companies will play out. This differentiation will likely be increasingly important in the long-term strategies of companies (e.g. ADM vs Cargill), and be an interesting topic in relation to the future order of this industry. The differences will play a role, but in which ways?
The trend of world population growth and the problem of feeding such numbers has become more important geopolitically-speaking. Given the historical lack of political will, we perhaps run the risk of sustainability being side-lined in this rush to grow output. At the same time, humans as a species have become more interested in the future, not only of ourselves as individuals but also in the future of humanity itself.
We need something like sustainability to rally behind. The more we know, the more we realise we need to preserve our future well-being. It is, therefore, also possible that individual and corporate interest in sustainability will make this a dominant theme for the next 20 years, even in jurisdictions where political leadership on the topic is lacking.
The influence of politics and geopolitics, and even emotions on the world is proven. It’s not tangible but the animal nutrition sector is very much a victim of that.
What else will shape the industry over the next 20 years? So much of it comes down to human behaviour—influential events such as the holding of a referendum, the takeover of a company, the launch or end of a trade war – involve powerful human dynamics, deeply influential yet nearly impossible to predict.
One prediction seems clear enough: it’s important not to underestimate the dangers of populism. Populist influences are threatening to become even more important in trade and industry discussions. In a larger sense, things that you cannot and do not control seem to be having even more influence on companies. The importance of fully thinking through long-term strategy and preparing contingency plans is increasingly evident.
Taking all this into account, and as our readers are challenged by volatility, further advances in technology, the evolution of regulation and an ever more demanding customer-base, Feedinfo will continue to innovate, and to address the challenges that shape the future of the industry.
We will continue to monitor how the industry intends to feed over 40 billion head of livestock and poultry by 2050, and by extension the 9 billion + humans who’ll be living on Earth in 2050 in a sustainable and responsible manner.
The future will see animal nutrition moving forward even further as our industry seeks to answer the low-cost feed formulation/best-performance conundrum while increasing the awareness of societal demands such as animal welfare and transparency. In other words, feed conversion will continue as an important driver, considering that better feed conversion is related to less feed and water consumption, better feed digestibility and less excretion, or less pollutant elimination.
Just as surely, advancements in big data, artificial intelligence, nanotechnology, renewable energy and other technological revolutions will influence animal nutrition—indeed, the question here is not if, but how these will transform our industry.
The potential for improved animal nutrition has perhaps never been more promising.
Feedinfo, 20 years in the making. We are getting ready for the next 20 and more, which will prove to be just as challenging and exciting as the previous 20. We’re excited about the future.