World Feed Market and Turkey

Global feed production, which was 963 million tons in 2013 reached to 980 million tons with an increase of 2 percent in December, 2014. Although China was once again the leading producer of feed with 183 million tons manufactured in the official estimate of more than 9,500 feed mills, this is the second year of decline in its production. The United States and Brazil ranked second and third respectively, with 172 million tons from 6,718 feed mills and 66 million tons from 1,698 feed mills.

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Raising livestock has always been a source for producing staple foods which are important for human nutrition. Besides, it has social functions enabling plant and industrial waste to be recycled and employment areas to be created. Increasing world population causes the need for animal products as well as agricultural products like grains. Thus, the place and importance of livestock farming in economy increases gradually.

Developing livestock farming, increasing the production of animal products like meat, milk and egg does not depend on using fertile races with high capacity. Feeding animals with rations that will meet their nutrient needs in sufficient amount is a significant element to increase production. It is impossible to meet nutrient needs of animals with high fertility and poultry, which is above 40. For preventing health problems of animals, related with malnutrition, and also for obtaining more quality animal products, using sufficient mixed feed is of great importance. Thus, it is known that in some countries with developed livestock farming, mixed feed industry, so mixed feed production and consumption have developed greatly through the history. Besides, technologic developments in this area caused the contribution of mixed feed industry to animal production to reach higher levels

WORLD MIXED FEED PRODUCTION AND FEED INDUSTRY
Mixed feeds have a long history in the world production. The first industrial production of mixed feed was started at the end of 1800s in Missouri USA and the same facility still continues to production. The first arrangements for mixed feed sector in the world were made between 1916 and 1920.

According to “Global Feed Research Summary” that Alltech prepared for 2013 and evaluated mixed feed production in 130 countries, feed production amount in 2012 which was 954 million tons increased 1 percent and reached 963 million tons in 2013. As to the summery, low increase amount in production is possibly reasoned by drought which affected more than 30 countries in 2012 and increased raw material prices.

“2015 Global Feed Survey” prepared by Alltech shows that global feed production, which was 963 million tons in 2013 reached to 980 million tons with an increase of 2 percent in December, 2014. Data of 2014, shows that there is an increase of 2 percent in feed industry.

It is stated in the survey that feed industry trends throughout 2014 were impacted by myriad events, including widespread droughts, high costs of raw feed materials, fluctuating governance over import/export standards, and animal diseases such as avian influenza and the PED virus in pigs, which proved to be disastrous for many farmers.

Mixed feed production in the world is intensified in South America, Asia and Europe. As to the research of Alltech, China is the biggest producer country meeting 19,6 percent of global mixed feed production. America follows China with 17,4 share, Brazil with 6,8 share. Mexico, Spain, India, Russia, Japan and Germany are the other leading producers.

Although China was once again the leading producer of feed with 183 million tons manufactured in the official estimate of more than 9,500 feed mills, this is the second year of decline in its production. The country experienced a notable 4 percent decline from last year’s numbers. Some analysts contribute this downturn to a slow hog market and bird flu that suppressed consumer demand. The United States and Brazil ranked second and third respectively, with 172 million tons from 6,718 feed mills and 66 million tons from 1,698 feed mills. India, on the other hand, had a considerable increase in feed production, up to 29.4 million tons (a 10 percent increase over 2013), owing mainly to favorable weather conditions and consistently-improving farming methods and technology.

When grouped into regions, Africa and Latin America saw the greatest growth in 2014. Asia Pacific, Europe, North America and the Middle East all showed a slight incline. Several individual countries can be highlighted as bright spots of growth and development. Among them were Turkey, Indonesia, Romania, Tunisia and Bolivia, all of which experienced their second consecutive year of significant increase in feed production.

It is estimated that there are 31 thousand 43 feed mills in global feed industry which has a value of 460 billion dollar in 2014. One thousand of these mills locate in Africa, 13 thousand 736 in Asia, 5 thousand 165 in Europe, 3 thousand 914 in Latin America, 288 in Middle East, 6 thousand 790 in North America.

According to the research of Alltech, annual feed production of Thailand based CP Group which is one of the 10 largets companies is around 27 million tons. China based New Hope Group follows this company with 20 million tons of production. One of the most important suppliers in the world, USA based Cargill has the third place with 19,2 million tons. USA based Purina Animal Nutrition follows Cargill with 12 million tons. The other companies in the top 10 and their production amounts are as follows: BRF (Brazil) 11 million tons, Tyson Foods (USA) 10,3 million tons, COFCO (China) 8,3 million tons, JA Zen-Noh (japan) 7,5 million tons, Shaungbaotai Group (Twins Group – China) 6,6 million tons ve Wen’s Food Group (China) 6,5 million tons.

FEED PRODUCTION ACCORDING TO THE SPECIES AND REGIONS
When looking at feed production as to the global livestock species in 2013, poultry held its position as industry leader with a 46 percent share of the feed market at 444 million tons and continued its leadership. Poultry showed almost 6 percent growths over the prior year. However, it was aquaculture that saw the largest percentage of growth in 2013, with a 17 percent increase, up to 34 million tons.

Growth in figures for pig feed was close behind, with an estimated 11 percent increase over 2012, moving to 243 million tons globally. The pet food sector was also up slightly in 2013, and represents 20.7 million tons and equine feed tonnage once again increased 14 percent to 12.4 million tons. The ruminant feed market, comprising dairy, beef and small ruminants, decreased in tonnage demand between late 2012 and December 2013.

When looking at feed production as to the global livestock species in 2014, it is seen that poultry group is the leader in the industry with a share of 45 percent and 439 million tons. Pet and pig group has the highest increasing rate (5,3 percent in pig feed, 5 percent in pet feed). It is seen that water products increased 1,8 percent; poultry and horse breeding declined.

MIXED FEED PRODUCTION IN TURKEY
According to the data of Food, Agriculture and Livestock Ministry; Turkey’s total mixed feed production that was 9,5 million tons in 2008 reached 13,1 million tons in 2011. Along with the ongoing increase in 2012, feed production of Turkey reached to 14,5 million tons and reached to 15,9 million tons in 2013, 18 million tons in 2014. Feed production data of turkey points out that production has increased steadily in the last 10 years. Total rising rate in the last 10 years is around 160,7 percent. Recorded total mixed feed production by august, 2015 is 10,5 million tons.

The largest share in total mixed feed production belongs to dairy cattle feed in 2014. Dairy cattle feed production that was 2,7 million tons in 2014 is followed by broiler feeds with 2,6 million tons. Eggs feed is in the third place with 2 million tons; cattle fattening feed is in the fourth place with 1,5 million tons. Production amount of other mixed feeds is 1,5 million tons.

Figures of mixed feed production that was realized between 2002 and 2015 are indicated in the table by taking records of Food, Agriculture and Livestock Ministry into account. These figures represent the invoiced official figures reported to the Ministry. Thus; in addition to the 18 million ton-mixed feed that is the registered feed amount in Turkey in 2014, mixed feed producers that make productions for themselves and non-invoiced sales in the sector should be taken into consideration. In this case; it is said that Turkey’s mixed feed production is over 15 million tons.

TURKISH FEED SECTOR
The first initiative on mixed feed industry in Turkey was started by the private sector in 1955. Inıtiative in real terms was realized with the establishment of Yem Sanayi Türk A.Ş. in 1956 under the leadership of the government. Operationalizing its own facilities, the aforementioned company established 26 facilities in partnership with the private sector.

Feed mills of the private sector started to be established as of 1965. Completing its mission of being a pioneer, Yem Sanayi Türk A.Ş. withdrew from the sector in 1996 by selling all feed mills within the scope of privatization. The entire mixed feed was started to be produced by the private sector after this year. Numbers, capacities and capacity usage rates of the mixed feed mills by years are indicated in the table below.

As to the data of Ministry and Turkish Feed Millers Association (Türkiyem-Bir), the number of mixed feed mills which was 470 in 2008 declined to 465 in 2009/10 years and increased to 478 in 2011. There is no accurate data for 2012; however according to the statements of President of Turkish Feed Millers Association, the number of feed mills in Turkey reached to 492 in 2013. Operation capacity of these 492 feed mills in just a shift is 16 thousand tons.

Active mills in Turkey are mainly located in Aegean and Marmara regions; Central Anatolian Region follows them. It is said that 61,7 % of total active feed mill numbers in Turkey in 2010 consists of facilities with capacities lower than 10 tons/hour. The rate of facilities with 11-20 tons/hour capacity is 26,2 % and the rest 12,1 % belong to the facilities with capacity over 20 tons/hour.

83,4 % of inactive facilities, in other words the closed ones are the ones with capacity lower than 10 tons/hour. Thus the new facilities in the sector prefer to establish high capacity mills.

FEED PRICES IN TURKEY
Mixed feed prices in the sector were determined by the Government after Feed and Forage Act Regulations numbered as 1734 were put into force, but the prices have been formed in competitive market conditions after the decisions taken on 24 January 1980.

Feed industry is an intermediate sector. It takes its inputs mainly from crop production and presents its production to livestock production. Due to this feature, feed prices are affected from two factors. One is raw material prices and the other one is animal product prices.

Feed prices increase as the feed raw material prices increase. As to the data of Turkish Feed Millers Association, the price of broiler feed which was 895 TL per ton in 2010 increased to 1.020 TL in 2011, 1,62 TL in 2013, and 1.264 TL in 2014. Broiler feed is one of the most expensive feed groups. The price of milk feed which was 490 TL per ton in 2010 reached to 710 TL in 2012, 728 TL in 2013, 758 TL in 2014. The prices of fattening feed which was 479 TL per ton in 2010 reached to 684 TL in 2012, 708 TL in 2013 and 744 TL in 2014.

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