Trends in the demand for livestock feeds

Research and project evaluations frequently cite access to greater quantities and higher quality of feed as limiting factors to livestock production levels worldwide. Pasture grazing has been the traditional approach to livestock rearing, but land use has begun to shift. 

The livestock industry has a diverse group of producers around the world who work to address the increasing demand for livestock products, especially food-related products. The market is normally influenced by the increase in population and economic growth taking place in local and regional markets. But now, development organizations are also recognizing the need for higher concentrations of proteins and micro-nutrients contained in animal source foods (ASF) to fight the issues of malnutrition in vulnerable populations. 

The demand for resources to meet the needs of emerging and developing economies' ASF requirements will place greater pressures on the production of livestock feeds. Another point which will add to the demand for higher quality livestock feed is the introduction of improved breeds. These breeds bring more feed efficiency with their genetic traits, but this potential can only be obtained if the right types and quality of feedstuffs are provided to these animals.

Points of constraint

With the cost of feed often representing over 50 percent of the production costs for livestock producers, feed is a major constraint to cost-effective production of ASFs. In many emerging economies, the feed industry has not yet developed. The poultry sub-sector is normally a leading point which pulls the feed industry via a vertically integrated process. Feed mills then traditionally diversify into the dairy sub-sector next, followed by another round dependent on local market needs for swine, beef or small ruminates.

The major factors underlying the sluggish growth in the production and processing of livestock feeds include: slow adoption of specialized forage, seasonal variations in quality and availability of forage, competition for maize consumption, production and trade of high concentrate protein sources, conversion of agro-industrial by-products to feedstuffs, the transition of livestock production from subsistence into agribusiness, investment costs into feed mill infrastructure, distribution of feed products to farmers and the overall knowledge transfer to farmers, millers and feedstuff producers.

Pathways to consider

Development organizations and the private sector are starting to innovate in the feed sector based on primary market segments. Small- and medium-scale mixed livestock-crop systems are considered the largest potential market to address both the ASF demands and the required feedstuffs to raise those animals. Generally, local governments have made this a priority sector. The production of livestock and crops in these systems is closely integrated and has good support from historic management practices. These farms have access to less expensive sources of labor and are increasingly operated by women. Enhancements to these farms should include the addition of better quality forages to cropping cycles, use of crop residues, introduction of improved livestock genetics and access to improved animal healthcare and pharmaceuticals. These changes will improve production efficiencies per unit of meat, milk or eggs.  

• Livestock-only systems represent an estimated 200 million people who herd livestock in areas where rainfall will not support crop production. Most of this segment is represented by pastoralists in a low-input-low-output (LILO) scenario. Because of the weather's effect on grasses and fodders in these areas, the potential pathways are greatly reduced. This constraint also limits commercialization of these herds. If pastoral herds evolved into breeding herds — where young stock were weaned early, then transported to intensive systems supported by feedlots — the management of resources would improve.
• Commercial-scale production systems are where several efficiencies can be combined to effect the greatest rate of change to meet future demands. These systems are common in high-income countries and are receiving high levels of interest and investment in the emerging countries. These types of livestock production systems can access inputs that address all the major constraints to produce ASF at lower costs with less of an environmental footprint. This improvement in efficiency is frequently documented at 200-500 percent greater than the small- and medium-scale systems.

Who should be involved?

Private-sector investment, research and product development should be the lead actor. This will require a small to multi-national effort to supply the new species of forages that meet the requirements and financial means of producers. In addition, financial institutions must be educated on viable business models that can support the production or value-addition of livestock feeds. You will generally find that all the necessary market actors are in the marketplace, but they simply don’t know about each other, don’t trust each other, or don't have the networking skills from a neutral party to ask them to come together. By providing some coordination through producer organizations this barrier is frequently overcome.

Government and the enabling environment for the livestock feed sector starts with regional trade.

Include animal feeds and ASF in the activities of the trade hubs. The international trade of raw materials for livestock feeds is developing rapidly, and many trade related donor programs have been established to develop ASF exports. However, trade hubs are not integrating the grains or by-products, such as soybean meal, into the project activities.

The right mix of these systems to match the feed resources is a pathway to consider in addressing the long-term needs for worldwide access to ASFs. With the renewed interest in high nutrient density ASFs to assist the food security concerns around the world, livestock are up to the task.

Written by Mark Mitchell of Land O’Lakes International Development