A Year of Turmoil: Chinese Feed industry Attempts to Close Door on Year of Crises to Move Forward With Vigor

[BEIJING] – Speakers at the Alltech China 20 Year Celebratory Summit gathered in Beijing to evaluate the current state of play of the world’s largest feed market. Following a decade of constant growth, the Chinese feed industry faces a series of challenges which is causing this growth to slow and even stagnate.

Li Xirong, executive vice chairman and secretary general of the China Feed Industry Association discussed the 12 years to 2012 in which Chinese feed production increased by an average of 10 million tons per year, reaching almost 200 million tons. According to the Alltech Global Feed Tonnage Report 2012, China became the world’s largest compound feed producer in 2012 with 198 million tonnes of domestically produced feed.

However, 2013 saw the widespread occurrence of avian influenza heavily impacting the Chinese yellow chicken sector, although having less of an effect on broiler chickens overall. Pig diseases, particularly PRRS viruses have continued to affect the performance and productivity of pigs. The dairy and beef sectors have also experienced a general malaise with the aquaculture market being one of the few markets to demonstrate continued growth. Growth seemed to return in the second half of 2013 and is predicted to continue in 2014.

“Food scares and recalls continue to create a gap in consumer confidence that must be addressed,” said Aidan Connolly, vice president at Alltech and adjunct professor of marketing at UCD Michael Smurfit Graduate Business School. Incorrect labeling of meats, reuse of meats that are not intended for human consumption, continued challenges with contaminants being found in milk and the reoccurring issues with overuse and misuse of antibiotics have made food safety a primary concern for consumers. Food production and farming stories feature consistently in the newspapers and television to a degree not common in other Asian countries.

2014, however, promises to be better. The growing influence of the Chinese FDA, increasing quality standards being imposed by the purchasers of food, industrialization and professionalization of farms, and the proposed ban of antibiotic growth promoters by the Chinese government all aim to regain consumer confidence in the food chain and should allow the industry to return to strong growth. According to Xirong, of the 200 million tons of growth in the feed market over the past years, nearly 60% has occurred in China.