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How Chinese feedstuff industry during the great integration by the United States

Number of visits: Date:2014-03-19



 Can be seen from the past the feedstuff industry development trajectory, aquaculture industry integration, and so did the feedstuff industry consolidation.By the United States, with China's feed in the period of great integration and how to travel?

World's two largest countries in the feed production concentration rising stage of development, but this process, as the world's largest feed producer of China, ranked second behind the United States.The United States currently has more than 5200 feed production enterprise, the enterprise has a peak reduced more than 30%, and China still has more than 10000, consolidation is right.

Can be seen from the past the feedstuff industry development trajectory, aquaculture industry integration, and so did the feedstuff industry consolidation."Between 1950-2013, the American farm Numbers dropped from 530 to 220, scale of farmers after their investment in the production of feed, the demand for commercial feed production capacity is down, is followed by a consolidation trend and demand of feed industry."The feed industry association, Jeff said Mr Cannon.

The United States is gradually reduce the number of feed production enterprises, but the scale is growing, in order to improve their own competitiveness, the United States specializing in commercial feed production enterprises to actively and animal husbandry, aquaculture and food enterprises to joint-stock restructuring, achieve the industrial chain of the enterprise.Now, set the feed production and breeding for the integration of diversified large enterprise groups become the main force of the feed production enterprise.

By the United States, with China's feed in the period of great integration and how to travel?We tried to from Jeff Mr Cannon mouth to find the answer.

 The standard of prospective

FAM: feed industry association as the United States, you can introduce the current situation of feed industry in the United States, including aquatic feed and association?

Jeff Cannon: the United States is currently the second largest feed producer in the world, second only to China.Animal husbandry and feed industry in the United States market participants, some of them are already engaged in feed processing, part of the original protein producers into feed production, are some of the stakeholders in the whole industry chain.According to the FDA, the USDA and AFIA, feed production amounted to 165 million tons in the year 2012, commercial feed (the note: American aquaculture intensive degree is higher, most of the feed enterprises adopt vertical integration mode, feed processing only as breeding a link in the chain and the commercial feed little, a lot of feed products directly by the internal link farms consume production accounted for about 50%.

The United States currently has more than 5200 feed production companies, China is more than ten thousand.Number of companies before the United States has more than 8000, now has reduced the number of more than 30%.The production of this kind of phenomenon, the main reason is that a lot of feed enterprises integrate together, larger scale;Other industry competition intensifies, more and more mature and more advanced technology used in the feed industry, make the feed production capacity has the very big enhancement, economic scale effect is produced.

Compared with China's aquaculture industry, the United States rarely aquatic feed, but the feed manufacturers have constantly use advanced technology to develop a growth market.

The feed industry association (AFIA) headquartered in Arlington, Virginia, is the world's largest professional business, legal, regulatory organizations in the field of animal feed.AFIA was founded in 1909, with considerable international presence, currently has 500 local and international enterprises, the state and a member of the international association.Members include the livestock and poultry feed and pet food manufacturers, integrators, pharmaceutical companies, equipment manufacturers, raw material suppliers and service agencies.The United States more than 70% of the feed producer for AFIA member.

  FAM: can be seen from the past the feedstuff industry development trajectory, aquaculture industry integration, and so did the feedstuff industry consolidation, there are no other driver?

Jeff Cannon: all sectors in the market development to a certain extent will be duly to consolidate.This is because the economy requires companies to make modest investment in the development of new technology, and in order to achieve sustainable growth also require companies to maintain their competitiveness.Although the breeding industry consolidation will surely help to speed up the integration of feed industry in the United States, but as time process there are other aspects of the power to enter and to promote the integration.For example, a customer demand for feed efficiency, the recombination of market resources, the innovation of science and technology, etc., are all on the catalyst that can boost the industry integration.

In China, there exists the same strength as well as the recent market increasing attention to feed and food safety, etc., these factors will certainly accelerate the integration of China feed industry.

  FAM: can have a high degree of the feed factory, sharing experience, at the same time give in the period of great integration according to what the significance of China?

Jeff Cannon: learn from the past the American experience, the first is that we need to continue to invest, constantly updated technology, the cost to a minimum.There is food production have to be very transparent, you need to ensure that our customers know where food comes from, not the consumer confidence.Meanwhile, we need to get the farming and animal husbandry as the top priority, because is already very mature industrial farming and animal husbandry.Is not enough to the attention of the farming and animal husbandry in America, we must continue to stick to it.In addition, we should strengthen the cooperation of industry, although we are in the process of doing business to competition, but we have a common goal, is the hope that the whole industry to sustainable development.

The feed industry has been good at establishing standards for forward-looking, practical technology, for enterprises to develop their market.As China's feed industry continues to grow, China's feed industry should also be dutiful to set their own standards, and adopt necessary measures to ensure the quality of the production of feed and the use of safe.

Big FAM: you are in an industry during the integration of large enterprises and small and medium-sized enterprises feed feed, respectively, have any Suggestions?

Jeff Cannon: each market has its corresponding to different levels of demand side.Mature with the development of China's feed market, everyone has the opportunity to develop to meet some special demand of the market, and targeted development to produce a corresponding products to meet the demand of the market, but also for their own enterprises to create opportunities to realize sustainable development.

 FAM: when it comes to guarantee the quality of the feed production and safety, China now also introduced a lot of relevant laws.America has very mature in ensuring food security system, on the feed production is how to embody?

Jeff Cannon: America has the most safe feed and food production systems, is based on the article has very strict laws and very good industry practice, and the government regulation system, joint federal and each state of the industry regulator, multi-pronged cooperation have today's results.

America has many laws, specifications, guidelines, rules, and projects, they are designed to ensure the safety of food and feed, over the past one hundred years in the United States has always been to do so.The congress of the United States developed countries feed food law, it is by the American FDA (food and drug administration) to regulate.We have 50 states, except Alaska state legislation and law are rules, including the food and feed safety, the state and federal legislation and the national legislation complement each other.

American regulators called AAFCO feed, it is established in 1909, contains many state and federal legislation institutions and personnel, it can feed on developing all law, including some identifying factors.If you are going to use a ingredients in the United States, but the ingredients are not AAFCO definition and approval is illegal.

American FDA and AAFCO two institutions joint supervision and standardize the entire food and feed industry in the United States, AAFCO is mainly aimed at ingredients, the FDA article mainly developed some law legislation.Every state in the United States, basically have adopted these legal rules framework, and constantly do a lot of work to maintain.

Although the FDA and many state legislators will go to is responsible for ensuring that business can be a good compliance laws, but the United States department of agriculture (USDA) will also go to regulation, especially the food quality and food safety law.Now, the USDA and FDA is updating the existing food safety laws and regulations, to ensure the safety of using feed in the American market.All feed raw materials supplier to the U.S. market (domestic and foreign) will simply to meet the requirements of the new regulations, all terms and conditions.People can look forward to, to these terms and conditions of the full implementation of the new regulations and effective implementation will be implemented in the next few years.




 According to the characteristics of America:

1, most of feed production enterprise and farming enterprises together, commercial feed production decline year by year;

2, the total number of feed enterprises falling, a single feed production enterprise's scale expands unceasingly, feed enterprise's profit mainly comes from economies of scale;

3, feed enterprise internal basic has its own scientific research institutions;

4, contract manufacturing, order production has become one of the main mode of the feed production;

5, almost no marketing personnel in the enterprises, also have no dealers, mainly through the electronic commerce, network or telephone sales, competition among enterprises depends on reputation, product quality and product types of competition;

6, feed or feed products are mostly bulk liquid feed.

  The integration of the dominant

Your FAM: services of international agricultural enterprises, they are most often encountered in the expansion of globalization, what is the problem of your proposal?

Jeff Cannon: multinational enterprises successfully extended the primary concern of the international business, is to be able to meet different business model and cultural differences between countries, and can adopt corresponding practical measures.Companies that success in a globalized business can stick to their core business and values, and according to the local environment to adjust their business focus in the host country and operation mode.

  FAM: as a representative of the world's largest feed your business head, specification and the interests of the association, which factors do you think in the feed industry at present and future in the United States and the world?

Jeff Cannon: first is global trade, it is now a very important factor.Global market demand for U.S. feed, affect the feed prices as well as the raw material price volatility.American companies and their technology began to expand the influence in the whole world, it also promoted the feed industry influence in the world, so American feed enterprises will have more opportunity to feed enterprises with the outside world for more extensive and in-depth cooperation.

The second is the integration of industry.Aquaculture industry consolidation affect the feed industry, this kind of integration was due to the further development of the technology, and industry need to be further compression cost needs to improve its competitive advantage.Between 1950-2013, the American farm Numbers dropped from 530 to 220, scale of farmers after their investment in the production of feed, the demand for commercial feed production capacity is down, is followed by a consolidation trend and demand of feed industry.Now the top 14 feed companies in the United States in the six have been into protein producers.

I could see feed production and animal production industry vertical integration, see the integration of feed producers and suppliers has become the leading level in the field of feed producers in the United States.The further development of feed industry is due to see further consolidation of capacity, which can better use the latest technology, to create the safest and the most cost-effective feed products.Although such consolidation is not so fast, but still in gradually expand, the feed production industry is still in the further development of market demand to meet the changing world.

Then there are America's energy policy to the influence of feed industry.The IFS creates a renewable energy project, the project has added to our demand for renewable fuel, from 2008 to 2012, when the ascent to 36 billion gallons, now consumes about 127 million tons of corn, so the extra demand for corn that have bigger us market price volatility, and reduces the supply of animal feed corn.Protein feed manufacturers and producers in the United States to the United States government's new energy policies are turned off, it also led to the feed formula a gradual change in the past decades.

In addition to climate and food safety.The past few years because of climate change, increased market volatility, we at the same time affected the feed industry, supply of commodity and stability.Food safety is a global problem.On January 4, 2011, President Obama signed the food safety modernization act (FSMA), take effect in July 2012, the comprehensive promotion in 2018.FSMA food imports to the United States set up a more rigorous level, the product exports to the U.S. market suppliers must ensure that the product can meet the requirements of the latest.

 FAM: facing the influence of many factors at the same time, what is the opportunity of the feed industry in the future?

Jeff Cannon: we must constantly to cooperation, for the transfer of technology.Feed industry in the United States has a responsibility to continuously promote a global market, accelerate the maturity of the industry, we feed in the whole globe.

We should and consumers together to build trust and confidence, and let them for we maintain a high level of trust and safety of the food supply for the next generation of people can also be involved in the work of agriculture.Only in this way can ensure agriculture continues unceasingly.Now agriculture is a new high technology industry, so we must keep a safe and peaceful environment, let more young professionals interested in agriculture, passionate, able to enter the agriculture industry.

We should also take on such a challenge, is to feed the whole world, to provide food of all the people of the world, this is a very worthy cause.We're going to use the most advanced technology to produce enough food, to the people all over the world to provide enough food.

 FAM: if you are looking for Chinese feedstuff industry has its own observation, also welcome you to comment.

Jeff Cannon: the development of China feed industry, contribution to the world animal protein production industry to provide the implementation of a unique position.But, she also want to take an active part in solving the global market focus on feed and food safety problems, and at the same time more to deal with the terminal consumer market to ensure the quality of breeding varieties of animal protein and edible safety play a leadership role.

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