*Aidan Connolly is vice president of Alltech Inc. and assistant professor of marketing at University College Dublin in Ireland. Dr. Mark Lyons is vice president, corporate affairs, and Dr. Karl Dawson is vice president and chief scientific officer, both with Alltech. This paper is based on a presentation made at the Ninth China Animal Husbandry & Feed Technology Economic Forum in Beijing, China.
NOBODY knows when animal feeding developed. It happened before the evolution of writing.
Techniques of animal husbandry developed spontaneously in several areas of the fertile crescent and played a key role in the development of civilization. The ability to create a stable food supply allowed the world's population to grow, population centers to develop and cities to emerge.
The domestication of wild crops and livestock and the introduction of irrigation and the plow meant that there was enough to feed a population of more than 200 million by the time of the birth of Christ. However, these early advances in agriculture were not enough to prevent periodic famines, which have continued into modern times.
The intensification of the food system initially involved the development of dedicated farming units, but it wasn't until the introduction of synthetic fertilizers in the 1900s -- allowing for greater control of nitrogen levels in soil -- that farming productivity really advanced. This enabled greater specialization and dramatic increases in crop yields, which in turn led to increased livestock production and allowed the population to double in the following 100 years. Advances made during the latter half of this period are known as the Green Revolution.
During the 20th century, agriculture began to embrace more advanced technologies and mechanization, leading to the industrialization of the food system. Farm technologies such as fertilizers, chemical pesticides, antibiotics and hormones became commonplace.
The growth of the feed industry led to increased consolidation of farms, which took advantage of economies of scale in production. At the same time, the overall number of farms diminished, while the size of the remaining farms increased and resulted in increased productivity overall.
For instance, between 1950 and 2000, the number of farmers in the U.S. declined from approximately 5.5 million to 2 million. During that period, the U.S. began to see the development of the farm specialization that exists today.
Beef production today typically involves four specialists: a cow/calf operation, stockers, feed grain growers and feedlots. Specialization offers opportunities for farmers to become experts in certain areas and to focus on technologies that increase the overall productivity of the farming system.
In poultry and pig production systems, producers have embraced fully integrated systems in which ownership of the feed production and slaughter plant and even the marketing of the end product, like TV dinners, for example, are under the control of one company.
The history of the modern feed industry can be traced back to the development of proximate feed analysis in Germany in 1810. These analytical systems allowed the feed to be analyzed in terms of crude protein, crude fiber, nitrogen, ash and moisture and introduced a new level of advanced technology to feed formulation. The first ground grain recorded in Vermont was fed in 1813, and the first report of batched mixed feed was in Massachusetts in 1870.
The feed industry then evolved into feed production. Some familiar names in the industry started up during this period. Cargill started feed production in the 1880s, and Purina started in the 1890s. Innovations such as pelleted feed were introduced in the late 1920s.
The U.S. is a good example of how the global feed industry has developed. Initially, locations were chosen due to their proximity to flour mills in places like Kansas City, Mo.; Chicago, Ill.; Minneapolis, Minn., and Buffalo, N.Y. In these cases, other nutrients were added to the basic flour byproducts through in-line mixing.
In the 1950s, formulations became much more complex; feed manufacturing moved closer to the farm in the form of smaller feed mills using batch mixing. Also in the 1950s, extruded pet food was introduced for the first time.
In the 1960s, feed mills began to expand in size, sometimes producing between 200,000 and 500,000 tons annually. However, feedlots and some farms also chose to install their own small feed mills, with the intent of becoming more competitive.
In the 1970s, the development of premix began, which allowed more and more feed production to take place closer to the farm. The introduction of computerized feed manufacturing in 1975 continued the trend toward decentralization. Feed pelleting was introduced in the 1980s.
Many other innovations we take for granted were developed relatively recently. Synthetic vitamins were added to feed for the first time in the 1940s, antibiotics were introduced in the 1950s, ionophores were first used in the 1970s and liquid methionine use came about in the late 1970s, with other amino acids appearing during the 1980s.
Many of the major supplementation strategies used today were developed over the last 30 years. Live yeast cultures were added to dairy diets for the first time in the early 1980s. Enzymes were first used for monogastrics in 1987, and the industry has widely embraced phytase since about 1990.
Feed industry sales today are valued at more than $100 billion, and the industry is a major user of corn, feed grains and soybeans.
Looking at industrialization globally, the trend continues toward more tons produced from fewer feed mills.
An example of this can be seen in Europe, where, although the industry has changed dramatically with more countries joining the European Union, the size of a typical feed mill has gone from a level of approximately 10,000 tons per year to 50,000 tons per year, and the number of feed mills has declined from approximately 10,000 to 2,000 today.
This trend has been replicated in the U.S., which also has seen an overall reduction in the number of feed mills.
The situation is similar in China, where the number of feed mills has declined from 13,000 to 10,000.
An Alltech feed survey looked at the overall feed business and established that 873 million tons of feed were produced globally in 2011. The survey's main findings include:
* China is the number-one market for feed.
* The poultry industry represents 44% of total feed production, reflecting the fact that poultry is successful as the lowest-cost type of meat, it is considered healthy, it is acceptable to most religions and it is produced using a very efficient process.
* Aquaculture is the fastest-growing area in terms of the other feed sectors.
Feed produced in Europe varies from feed produced in other parts of the world because it contains a greater proportion of byproducts. Pig feed produced in Europe has been found to contain a high level of oilseed and food industry co-products and fats and oils of different varieties.
In contrast, U.S. pig feed has long been comprised of primarily corn and soybean meal. This is changing today, though, and global rations are becoming more complex. The trend is toward diets that contain more feed ingredients in general and more byproducts in specific.
Feed mills around the world are embracing automation, even those in countries with lower labor costs. There are many reasons for this, but biosecurity and traceability are becoming very important issues and are driving the automation process.
Feed industry of future
What might the future of the feed industry look like?
It is clear that the dramatic increase in the cost of feed will increase the need for all companies to look very closely at the issue of feed efficiency. In addition, technological advances in raw material production will provide new types of feedstocks that will seriously alter the way the industry thinks about formulating feeds. These will no longer be important considerations just in monogastric animals but also in ruminants, for which inexpensive feed sources are becoming increasingly limited in supply.
Feed conversion ratios will be important. For example, if feed is estimated to cost $320 per ton and feed conversion is improved from 1.8 to 1.7, while this represents only one point of feed conversion, it is the equivalent $1.79 per ton of feed. In the case of pig feed estimated to cost $350 per ton, if feed conversion is improved from 2.70 to 2.69, this is worth $1.30 per ton.
Also, global feed companies that listen to consumer concerns will pay attention to greenhouse gas emissions and their overall environmental impact and will push feed mill and farm efficiency forward.
Food safety will continue to be a very serious concern and will ultimately be addressed at all levels of the food chain.
Food quality will increasingly become a priority for many companies and consumers alike. As consumers become more selective about what they eat, they will ask questions about what food animals eat and will demand accountability at the feed mill.
Finally, increased consumer pressure will move environmental and sustainability issues to the forefront of agricultural production. This will force the feed industry to use innovative ways to decrease the environmental impact of agricultural production.
Alltech believes that the feed system of the future will be increasingly interconnected using information technology and that these connections -- among the farm, feed mill and processing plant -- will allow the information to flow from one of these links in the food chain to the others. By matching available feed with demand, it will be possible to dramatically increase the efficiency of the livestock industry and to decrease waste.
On the farm, measurements will be taken in real time, with automated weighing scales sending continuous data on real-time bodyweights, body temperature controls being measured and feedback by probes providing the information needed to improve the efficiency of animal production while limiting waste. Systems for measuring environmental gases and many other biological and chemical parameters will be useful for documenting the effect of nutrients on animal health and welfare. There also will be an increasing commitment to biosecurity on the farm.
Similarly, molecular probes currently coming from nutrigenomic approaches will become standards for understanding the environmental and nutritional stress factors that limit efficient production. These technologies promise to add a new level of precision to effective feed manufacturing and livestock production.
In the future, technology will be used to identify the effect nutrition can have on gene expression, particularly targeting genes involved in the growth rate of animals, disease prevention and meat quality. These will make it possible to define anti-nutritional interactions and feeding strategies that take advantage of the natural conditioning processes associated with prenatal and perinatal feed management practices.
The feed mill itself will become "smart," with the use of near-infrared (NIR) probes being part of the operation. This will allow for the analysis of incoming raw materials in real time and the reformulation of diets on a minute-by-minute basis to reflect the real-time information both as a result of these NIR probes and also from having feedback from the farms and the processing plant. Additionally, rapid in vitro digestion modeling systems will provide new ways of defining the true nutritional value of incoming raw materials as well as the final feed products leaving the feed mill.
It is clear that the feed industry will embrace solutions to a greater degree and at a faster rate in view of the challenges it faces. Above all, feed digestibility and feed conversion will be vital, particularly with record-high feed costs, which are now more than twice as expensive as ever before.
Finally, the requirement for safe food must originate with safe feed. Today, feed may contain many hazards, including the presence of heavy metals such as arsenic, lead and cadmium. Additionally, dangerous levels of dioxins, polychlorinated biphenyls and mycotoxins are entering the food chain through animal feeds.
What are the lessons for the world's feed producers?
Feed industry consolidation will continue -- decreasing from current estimates of 25,000-30,000 feed mills by a further 50% over the next 5-10 years.
Automation will increase, but this will be achieved with real-time automated and verification systems rather than relying on suppliers to be straightforward. "Trust but verify" will be the phrase of the day.
Analytical technology will let the industry observe and define the nutritional value of feed instead of just feeding based on imprecise nutrient profiles. These tools also will allow for the detection of contaminants and will move the industry to a new level of food safety.
Finally, with the expectation of continued record-high feed costs, nutritional strategies will emphasize maximizing feed conversion rates and feed digestibility, using novel raw materials such as algae and moving toward fully embracing "precision nutrition."