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World Compound Feed Market and Turkey

Researches show that global compound feed production, which increased to around 995 million tons with an increase of 15 million tons in 2015 reached to over 1 billion tons in 2016 for the first time. 1 billion 32 million tons of production in 2016 represents the highest amount reached so far. With the last data, it is seen that world feed production has shown 161 million tons of increase in the last 6 years excluding 2017. Despite this increase in production, the number of feed factories has decreased. In other words, the aforesaid increase has been led by feed mills which are 7 percent less in number.

karmayemLivestock farming has always been a source for producing staple foods which are important for human nutrition. Besides, it has economic and social functions such as plant production, recycling industrial wastes and creating employment. The rapid increase in the world population consistently increases the need for animal products as well as agricultural products such as grains. Thus, the place and importance of livestock farming in economies of the countries gradually increase.

Development of livestock farming in a country or increasing the production of animal products such as meat, milk, and egg does not depend only on using highly fertile races. Feeding animals with rations that will meet their nutrient need sufficiently and in a balanced way is a significant element to increase production. Highly fertile animals, especially poultry, need more than 40 nutrient and it is impossible to meet this need with one or two types of feed. For preventing health problems of animals due to malnutrition, and also for obtaining more and more quality animal products, it is of great importance to use sufficient amount of compound feed in animal feeding. Thus, it is known that in countries with developed livestock farming compound feed industry, and as a consequence compound feed production and consumption, have developed greatly through the historical process. Besides, technological developments in this area caused the contribution of compound feed industry to animal production to reach higher levels.

WORLD COMPOUND FEED PRODUCTION AND FEED INDUSTRY
Compound feed production date back to old times. However, the first industrial production of compound feed started at the end of the 1800s in Missouri, the USA and the same facility still continues to production. The first arrangements for compound feed sector in the world were made between the years 1916 and 1920.

According to “Global Feed Research Summary” prepared by Alltech for 2013 and in which compound feed production in 130 countries is evaluated, feed production amount in 2012 which was 954 million tons increased by 1 percent and reached to 963 million tons in 2013. As to the summary, low increase amount in production was quite likely due to the drought which affected more than 30 countries in 2012 and increased raw material prices.

“2015 Global Feed Research” prepared by Alltech shows that global feed production, which was around 963 million tons in 2013 reached to 980 million tons in December 2014. Findings inferred from the data of the year 2014 reveal that there is an increase of 2 percent in the feed industry.

It is stated in the survey that the feed industry overall trends throughout 2014 were impacted by myriad events, including high costs of raw feed materials, fluctuation of governance over import/export standards, animal diseases such as avian influenza and the PED virus in pigs, which proved to be disastrous for many farmers, and widespread droughts.

The last annual report of Alltech has been published in 2017. According to this report, global compound feed production, which increased to 995 million tons in 2015 with a 15 million tones increase, exceeded 1 billion tons in 2016 for the first time. 1 billion 32 million tons of production in 2016 represents the highest amount reached so far.

With the last data in this report, it is seen that world feed production has shown 161 million tons (2.95 percent per year, 19 percent in total for 6 years) of increase in the last 6 years (excluding 2017). Despite this increase in the production amount, the number of feed factories has decreased. In other words, the aforementioned increase has been achieved by feed mills which are 7 percent less in number.

ROLE OF REGIONS AND COUNTRIES IN WORLD FEED PRODUCTION
Examining the world regions with intensive compound feed production reveals that Asia, Europe, North and South America come into prominence. According to 2017 report of Alltech, in 2016, Asia produced 367 million tons, Europe produced 249 million tons, North America produced 191 million tons and South America produced 157 million tons of compound feed. Africa and the Middle East have an extremely limited level of production with 39 and 27 million tonnes when compared to other regions.

As to the research of Alltech, China is the top producer country meeting 19.6 percent of the global compound feed production in 2013. America follows China with a 17.4 percent share, Brazil with a 6.8 percent share. Mexico, Spain, India, Russia, Japan, and Germany are the other leading producers.
In 2014, China was once again the leading feed producer among 130 countries with 183 million tons of production in presumably more than 9,500 feed mills. However, despite this leadership, feed production of the country decreased in 2014 as it did in 2013. Some analysts think that avian influenza suppressing the consumer demand and the hog market moving backward have an effect on this decline stage.

China held the leadership title in world feed production also in 2015 and 2016. However, despite the leadership, the production continued to weaken and decreased to 179 million tons in 2015. In the next year, 2016, production survived this slowdown and started to increase again. According to Alltech report, feed production of China reaching 187 million tons was performed by around 6 thousand mills. In previous years, this amount was achieved by more than 9 thousand 500 mills. Specialists notify that the consolidation process in the feed industry occurs in China in its most appealing form. At the end of this consolidation process, there has been approximately 30 percent of decrease in the number of mills in the country.

In 2016, the United States and Brazil ranked second and third respectively, with 169 million tons from 5,970 feed mills and 68 million tons from 554 feed mills. These countries are followed by Mexico with 33 million tons, Spain and India with 31 million tons for each, Russia with 29 million tons, Germany with 24 million tons and Japan and France with 23 million tons for each.

GROWTH TREND IN WORLD FEED MARKET
According to reports, Africa has been the fastest-growing region within the last 5 years. It is stated that growth of the region has exceeded 13 percent within the last 1 year. Nigeria, Algeria, Tunisia, Kenya, and Zambia are ranked among the shining stars of the region. Each of these countries has achieved a growth of at least 30 percent. So, the biggest growth opportunity for the feed industry is offered by Africa.

As we mentioned above, Asia-Pacific region is the leader in world feed production on a regional basis, and it is likely that it will sustain this leadership in the forthcoming years. China as the top feed producer of the region will continue to contribute to the maintenance of the leadership of the region. Countries showing a steady growth such as India and Japan and emerging countries such as Vietnam and Pakistan seem to consolidate this leadership. However, despite all, the expectation is such that the growth will not exceed 5 percent in the forthcoming years

Growth in European region has been limited to only 3.3 percent between the years of 2015 and 2016. It is thought that a part of this slow growth is resulted from a stormy year of the European Union due to ‘Brexit’ and reforms in agricultural subventions. The biggest contribution to the feed production of the region is made by Spain. Other important feed producers are Russia, Germany, and France which are also among top 10 in world feed production. Brazil is the strongest player in Latin America region. On the other hand, Mexico showed the greatest growth in the feed industry of the region between the years of 2015 and 2016. There is a significant improvement in milk and egg industries of the region. The greatest growth in the Middle East region is limited to 16 percent. In North America, feed production shows a relatively stable look compared to other regions.

FEED PRODUCTION WITH RESPECT TO THE SPECIES
In global feed production, when looking at the amount of the production with respect to the livestock species, it is seen that poultry holds the first rank. Poultry group feeds representing 46 percent of the feed market with 444 million tons of production amount in 2013 decreased to 439 million tons in 2014 and reached to 464 million tons with a record rise in 2015 with. In 2016, there was a decrease of 12 million tons in the production of poultry group feeds when compared to 2015. However, poultry feed production which was 452 million tons in 2016 is still continuing to constitute approximately 44 percent of total feed production.

The highest production amount following poultry group belongs to pig feeds. World pig feed production which was 243 million tons in 2013 reached to 256 million tons in 2014 and remained at 254 million tons in 2015 with a decrease of 2 million tons. However, the last reports show that production has reached to 272 million tons with a record increase in 2016 which was the peak of the last years. Pig feeds constitute 26 percent of world feed production with this amount.

Another feed group mostly produced in the world is ruminant feeds. Being around 196 million tons in the years of 2013 and 2014, ruminant feed production reached to 201 million tons in 2015, and 221 million tons in 2016.

COMPOUND FEED PRODUCTION IN TURKEY
According to the data belonging to Ministry of Food, Agriculture, and Livestock, Turkey’s total compound feed production that was 9,5 million tons in 2008 reached to 13,1 million tons in 2011. The feed production of Turkey that has reached to 14,5 million tons along with the ongoing increase in 2012, reached to 15,9 million tons in 2013 and 18 million tons in 2014. Turkey’s total feed production reaching around 20 million tons in 2015 and 2016, reached to 13,5 million tons until the end of September 2017.
The data about Turkey’s feed production points out that production has increased steadily in the last 10 years. When examining the data, it is seen that the total rate of increase of feed production has reached to 83 percent from between 2010 to 2016.

The largest share in total compound feed production of Turkey belongs to dairy feed as of 2016. Dairy feed production that was 5.8 million tons in 2016 is followed by broiler chick feeds with 4.5 million tons. In the same period, cattle fattening feed is in the third place with 3.8 million tons while eggs feed was in the fourth place with 2.9 million tons. Production amount of other compound feeds was 3.2 million tons in 2016.

TURKISH FEED SECTOR
The first initiative on compound feed industry in Turkey was started by the private sector in 1955. Initiative in real terms was realized with the establishment of Yem Sanayi Türk A.Ş. in 1956 under the guidance of the state. While operationalizing its own facilities, the aforementioned company established 26 facilities in partnership with the private sector at the same time.

Feed mills of the private sector started to be established as of the year 1965. Completing its mission to be a leader, Yem Sanayi Türk A.Ş. withdrew from the sector as of 1996 by selling all feed mills under the scope of privatization. The entire compound feed was started to be produced by the private sector after this year.

According to the records of the Ministry and Turkish Feed Millers Association (Türkiyem-Bir), the number of compound feed mills which was 470 in 2008 declined to 465 in 2009 and 2010 and increased to 478 in 2011. There is no clear data for 2012; however, according to the statement of President of Turkish Feed Millers Association, the number of feed mills in Turkey reached to 492 in 2013. Operation capacity of these 492 feed mills in a single shift is 16 thousand tons on a yearly basis.

Active mills in Turkey are mainly located in Aegean and Marmara regions; these regions are followed by Central Anatolian Region. For 2010, it is said that 61.7% of total active feed mill numbers in Turkey consists of facilities with capacities lower than 10 tons/hour. The rate of facilities with 11-20 tons/hour capacity is 26,2% and the remaining 12,1% represents the facilities with a capacity of over 20 tons/hour.

83.4% of inactive facilities, the ones that were closed down, had a capacity of lower than 10 tons/hour. Hence the new facilities in the sector prefer to establish high capacity mills.

TURKISH FEED INDUSTRY IN 2017

According to data of General Directorate of Food and Control that work under the Ministry of Food, Agriculture and Livestock published in September 2017 for Turkish feed operations; there are 13 thousand 933 companies representing different areas of the industry.

According to this data, there are 431 Turkish operations producing compound feed which are subject to approval. 321 of these operations have the characteristics of compound feed factory, while 110 of them consist of operations producing their own feed. Operations producing cat and dog feed are excluded from these categories and represented by 33 operations. The number of the operations that are subject to approval and produce feed additives and premixes is announced as 129.

Likewise, the number of feed companies which are subject to registration is declared as 674. While 193 of these operations are included in the category of registered feed factory, the remaining 481 are included in the category of companies producing their own feed.

TOP FEED PRODUCERS OF THE WORLD
According to 2016 research of Alltech, the production of the USA-based Cargill, the first of the top 10 feed companies in the world, is about 19.5 million tons. It is followed by China-based New Hope Group with 15.7 million tons of production. One of the leading feed suppliers of the world, USA-based Purina Animal Nutrition has the third place with 12,7 million tons, and China-based CPP China follows this company with 12,4 million tons.
The other companies in the top 10 and their production amounts are as follows: Wen’s Food Group (China) 12 million tons, BRF (Brazil) 10,3 million tons, Tyson Foods (USA) 10 million tons, East Hope Group (China) 7,6 million tons, JA Zen-Noh (Japan) 7,2 million tons, Shaungbaotai Group (Twins Group – China) 6,6 million tons.

We also suggest you to read our previous article titled "World Fish Feed Market".

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