China once again held the top spot in global swine feed production with 79.6 million metric tons in 2018, but with African swine fever continuing to spread throughout the country, that number could significantly go down in 2019, according to the latest results from Alltech’s 2019 Global Feed Survey.

“Forty-two percent of China’s overall feed production is going to pigs and of course, there is a lot of discussion around this right now, with the outbreak of African swine fever, so this will be a challenging and interesting year in the Chinese market,” says Mark Lyons, CEO and president of Alltech.

The 2019 Alltech Global Feed Survey, released today, estimates that international feed tonnage has increased by 3% to 1.103 billion metric tons of feed produced in 2018, exceeding 1 billion metric tons for the third consecutive year. The eighth edition of the annual survey includes data from 144 countries and nearly 30,000 feed mills. Overall the feed industry has seen a 14.6% growth over the past five years, equating to an average of 2.76% per annum.

Lyons, who recently returned from a business trip to China, says there are estimates that ASF could remove 30% of Chinese pork production in 2019 and 2020.

“That is something for us to think about, because even as that pork is removed from the market, we know exports could only represent a a certain percentage of the picture,” Lyons says. “We know that the Chinese market is so dominant, so large, there are very few countries that export enough pork to make up that gap.”

After spending six years residing in Beijing and leading the Alltech China office, Lyons foresees a shift from pig feed production in China to other species.

“This is a place that knows how to adapt to changes,” says Lyons. “There are big shifts, there are companies talking about how to make sure they fill up their feed mills, and are looking at other species -- indeed we had a number of conversations around other areas such as aqua feed and pet feed.”

The second largest global feed sector, pig feed production only saw an increase of nearly 1% in 2018. The primary producing region for pig feed was Asia-Pacific, but this was also the only region that saw a decline in pig feed production as Mongolia, Vietnam, China, New Zealand and Japan experienced decreases. Lyons credits this to improvements in feed conversion rates.

“As we look to overall feed production we can see in some markets that this feed production is not increasing, because FCR is improving all the time and China, our leader in pig production, is exactly that example,” Lyons says.

From a tonnage standpoint, Europe saw the largest growth at approximately 2.2 MMT of swine feed. Russia and Spain accounted for the majority, while Finland, Denmark, France and Poland also contributed. Latin America saw the greatest growth in pig feed at 5%, with the largest increase seen in Mexico and Argentina.

Although not typically known for its pig production, India took a big leap in pig feed production in 2018. As the industry is trending toward more organized farming in areas like Kerala and Punjab, new feed millers are contributing to this growth. Another surprise was Estonia. After years battling African swine fever, the country is back in the game, showing a more than three-fold increase in pig feed production over last year.

U.S. pig feed production remained in second with 43.7 MMT, followed by Brazil at 16.7. Eight countries make up 70% of all global swine feed production, which accounts for 27% of all global feed production.

In terms of feed costs, pig and layer prices grew the most, up 4% on average, while broiler feed costs were down 9%.

While Lyons anticipates volatility will continue as trade discussions persist globally, he says that shouldn’t influence individual business opportunities.

“We can see entrepreneurs taking actions, taking positions, sometimes against the trends that we are seeing overall, and they seem to be the ones that come out the best,” Lyons says. “We would really be emphasizing, think about your business, think about it in ways in which you may be able to overcome these trends.”

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