Asia is increasingly taking centre-stage in the global animal nutrition market, and perhaps this has never been more the case than in the current volatile environment with African swine fever news in China and Vietnam and ever-changing trade flows between Asia and the rest of the world.

During a panel discussion at Feed Additives Asia 2019 in Bangkok in late-June, feed additive industry leaders will attempt to answer questions like:

• What are the biggest threats to the feed additives industry in Asia?
  • What issues keep Asian industry leaders awake at night?
  • Where are leaders investing and prioritising?
  • What issues will we be discussing in 2020?

Feedinfo News Service was able to speak to the session’s three co-panellists – Hong Yang, Director of Asia, ADM Animal Nutrition; Matthew Smith, Vice President, Asia Pacific, Alltech; and Izuru Shinzato, Associate General Manager, Animal Nutrition Group, Ajinomoto – ahead of their trips to Thailand.*

[Feedinfo News Service] In your views, why is it important to address the concerns of Asia’s animal nutrition industry at Feed Additives Asia 2019? And how curious is the Asian audience when it comes to novel feed additives and their roles in addressing some of the challenges?

[Hong Yang] One of the biggest challenges facing the animal nutrition industry in Asia is how to meet the rapidly growing demand for animal protein with limited resources. New technologies such as novel feed additives certainly play an important role in improving animal production and food safety, protecting the environment and increasing industry sustainability. We believe our audience is very curious to learn about new feed additives and any new research data that highlights the use of additives at a reasonable cost.

[Matthew Smith] Globally, Asia has the demand – be it milk, beef, aqua in fact all protein – our challenge in Asia would be supply and more importantly the cost of supply – how do we become more self-sufficient and at the same time look for export markets outside Asia? With more acceptance that food choices define younger generations how do we leverage the integrated supply chains we have in Asia to create export demand? With all the major banks reporting that global agriculture has to concentrate on sustainability, the environment and reduced waste in the supply chain how can feed nutritional strategies address those ‘drivers’.

[Izuru Shinzato] There are so many uncertainties in the future outlook of the Asian livestock industry. Among them, how to grow the production in a sustainable manner should be one of the biggest concerns across the industry taking into account a situation where the demands for livestock products are increasing while the supply of some feed resources might be limited due to a competition with consumption for human food, which could result in a hike in the feed cost. Novel technologies are desired to overcome such challenges, and using “reliable” feed additives is definitely one of the best practices.

[Feedinfo News Service] One of the themes you will be addressing is risk – arguably the biggest threat for the feed additives industry in Asia. Can you provide a glimpse of the threats you will be mentioning?

[Hong Yang] I think threats to the feed additives industry in Asia can be simply divided into two classes: internal and external. Specifically, threats that arise from within the animal nutrition industry versus outside factors that affect the industry. Internal threats include animal disease control, poor farm management, limited raw material resources and quality variation, and feed additive efficacy and consistency. External threats include regulatory barriers, environmental regulations, antibiotic bans, and food safety and traceability policies. These factors can all have an influence on production costs and the future direction of the animal nutrition industry in the region. Above all, the threat of animal disease is the biggest concern.

[Izuru Shinzato] Shortage or unstable supply of feedstuffs, or more specifically protein ingredients, should be one of the biggest concerns. In order to balance the demand and supply of feed ingredients to meet the increased demands for livestock products, we have to consider not only increasing the production of such feed ingredients but also improving the efficiency of their use, because there is a limitation in increasing the capacity of producing feed ingredients across the world due to environmental concerns (land use, water consumption, etc.) Therefore, it will be necessary to employ new technologies to maximize feed utilization efficiency.

[Matthew Smith] Clearly one of the major hurdles for feed additive adoption lies in the need for differing requirements for feed additive registration in terms of the burden of information requirements and lengthy timelines. Reacting quickly to the challenge in a country with a novel strategy that is thoroughly proven elsewhere is all but impossible in the Asian regulatory environment of today. Historically for businesses that are based outside Asia but looking to supply into the region, logistical ‘hurdles’ have been high in some countries and again prevented rapid adoption of solutions that can make a difference.

[Feedinfo News Service] What can the Asian animal nutrition industry do to help mitigate the negative impacts of the ongoing outbreaks of African swine fever (ASF) in China and Vietnam?

[Matthew Smith] In any crisis, positive communication is essential and also the accurate sharing of information – where are the outbreaks? How many animals involved? What are the alternative strategies that could be utilized from a practical and a nutritional perspective to minimize the risk of further spread? How have these strategies worked elsewhere? Whilst such information can be made available from official sources, it needs to be shared.

[Hong Yang] First and foremost, I believe the government and the swine industry should work together to take effective actions to prevent the spread of ASF. Swine producers should follow government guidelines prohibiting the transport of pigs from infected areas. Second, the government has the ability to support the swine industry by providing funding and technical advancements to help prevent the spread of ASF. Since there are so many ways ASF can spread, it is a very challenging disease to eradicate. Only with the government’s strong support can the swine industry eradicate ASF. Third, the swine industry and the media should work together to educate the general population that ASF does not infect humans and that it is safe to eat pork. Maintaining pork consumption helps keep hog prices stable and the profitability of the swine industry less volatile.

[Feedinfo News Service] African swine fever is a serious issue but it isn’t the only one. Isn’t there a risk that all conversations keeping coming back to this when there are other industry matters at stake? (E.g. improving animal performance and welfare)

[Matthew Smith] Such risk is ever present – there will always be risk where we have farmed livestock but it’s important to highlight, discuss and discover solutions where possible – in many ways the ‘linkages’ that exist within our supply chain mean that we can’t simply limit focus to one particular area – we have to look at combined ‘risk’ and plan to mitigate wherever we can – bio-security, stock movement records and food safety.

[Hong Yang] I Agree. ASF is a hot topic today, but it is not the only issue. The animal nutrition industry in Asia should take a holistic approach to address all of the industry’s challenges. For instance, banning or reducing antibiotics usage is another important issue for many Asian countries. In fact, adding antibiotics into livestock feeds may be prohibited in China by the end of 2020. Personally, I don’t think the animal nutrition industry in Asia is ready to phase out antibiotics. And although there are many feed additives that act as alternatives to antibiotics, none of them are as effective and consistent as antibiotics. If, and when, antibiotics are taken out of animal diets, animal performance will be compromised. However, the antibiotic issue is not just a concern in Asia – it is a global concern. As a member of the feed additives industry, I think we all should advocate for research to discover new feed additives that work individually or in combination with one another to replace antibiotics.

[Izuru Shinzato] Animal welfare will definitely be an issue we have to think of. The pressure from not only activists but also consumers is getting stronger and stronger. But I am rather optimistic, because raising animals without the proper welfare standards could result in poorer efficiencies and as a consequence in poorer profitability in livestock production. Anyway we need to find an optimal level of welfare not to compromise the profitability of producers, though. Another concern is a wrong perception across (not all but a part of) consumers that “eating meat” is environmentally unfriendly. We have to keep educating the people outside our industry that livestock production has implemented lots of practices and technologies to minimize environmental burdens.

[Feedinfo News Service] Are the ongoing trade uncertainties between the US, China and the EU, impacting the Asia-Pacific feed additive sector in any way?

[Hong Yang] Yes, I believe the trade crisis between the U.S. and China is affecting the feed additive sector. Due to higher tariffs, soybean meal is more expensive, which translates to a more expensive diet. Different animal producers have different responses to more expensive diets. For some producers, they are only willing to pay a certain amount of feed cost. When that feed cost increases, they are less willing to use feed additives in their diets. On the other hand, some producers will use more feed additives like digestive enzymes and probiotics. A five percent digestibility improvement means more cost savings for a more expensive diet than a less expensive one. Another common strategy is to use alternative protein ingredients and crystalline amino acids when soybean meal prices go up. Late last year, the Chinese Feed Association recommended reducing dietary protein levels by using more crystalline amino acids in formulations. Crystalline amino acids not only helps reduce dietary cost, but also helps decrease nitrogen excretion to the environment. Based on conversations I’ve had with numerous nutritionists, I’ve learned that U.S. producers are using 30 to 100 percent more crystalline lysine in swine diets than producers in Asia.

[Izuru Shinzato] There was a significant impact on demand for feed grade amino acids when China announced it wanted to minimize its dependency on the import of the US soybeans. However, the influence was temporary. From a long-term viewpoint I think commodity markets are at the moment so global that they are rarely affected by the trade crises between two or three specific countries.

[Matthew Smith] As a U.S. based business we have to embrace trade discussions, but at the same time we balance those aspects of trade with the fact that we have manufactured in China for over 20 years. We have a responsibility to engage at the highest level of government, in all the regions we operate in, to find ways forward.

[Feedinfo News Service] We have mentioned African swine fever, trade disputes – both external events creating market volatility. In this context, how does your company seek to reassure its customers in the Asian animal nutrition sector with regard to the quality of the products you provide and their stable supply?

[Izuru Shinzato] Our products (amino acids) are not used for combatting the issue like ASF but definitely contributes to overcoming the volatility in the market environment because improving the feed efficiency is always one of the best practices to improve the profitability of livestock production. We, as one of the world leading amino acid manufacturers, are committed to providing the industry with new solutions to help grow the livestock industry in a sustainable manner.

[Matthew Smith] For the past ten years, Alltech has concentrated investment and acquisition strategies on local manufacture, globally and throughout the Asian region. This ensures our customer base has security of supply – an investment in manufacturing, of course, has to go ‘hand-in-hand’ with equal investment in QA/QC. Safety, quality and supply have risen above some of the immediate challenges we face today in Asia.

[Hong Yang] Product quality is our life blood. ADM maintains strict standards for the supply chain which requires collaboration, communication and accountability. When the price of raw materials varies, our product formulas remain relatively unchanged. This is not difficult to achieve in feed premixes because they do not contain most of the commodity ingredients. If for some reason, we need to adjust the formula, we make an adjustment based on extensive in-house research data to ensure the quality of the finished products. To avoid ASF virus transmission, all of ADM’s feed premix plants in China follow strict prevention protocols from disinfecting all incoming vehicles, to sourcing raw materials from approved vendors and storing some ingredients longer to mitigate risk. ADM is committed to providing quality product and maintaining a stable supply for our customers.

*Hong Yang, Matthew Smith and Izuru Shinzato will be speaking at the Industry Leaders Panel on Day 1 of Feed Additives Asia 2019 (26 June 2019), at the Millennium Hilton Hotel in Bangkok.

You can view the full agenda for Feed Additives Asia at https://www.feedadditives-asia.com/programme/