Influences of market forces on ingredient use and feed processing

By Patrick Garland, BOCM Pauls Ltd - This paper considers the changes in feed manufacture arising from Salmonella control, withdrawal of animal proteins, removal of used cooking oil, impact of concerns over genetic modification and the move to feeds without antibiotic digestive enhancers.

29 March 2005

4 minute read

Influences of market forces on ingredient use and feed processing - By Patrick Garland, BOCM Pauls Ltd - This paper considers the changes in feed manufacture arising from Salmonella control, withdrawal of animal proteins, removal of used cooking oil, impact of concerns over genetic modification and the move to feeds without antibiotic digestive enhancers.

Summary

The design, formulation and manufacture of livestock feeds in the EU, and in particular the UK, have undergone significant changes in the past 25 years. World trade patterns and economic policies have to some extent shaped these activities but in the more recent past social and political influences have had a more significant impact. The requirement for prevention of contamination of ruminant feeds with mammalian products and the specific controls employed are not discussed.

I. INTRODUCTION

It is logical to expect that the economic availability of raw materials suitable for animal feeds will be evident in the formulation of feeds. Regional policies might interfere with the economics of individual raw materials but fundamentally market forces and modern linear programming will determine the make up of rations. For example the CAP (Common Agricultural Policy) determines that, via price support mechanisms and import tariffs, the predominant carbohydrate sources in the UK and most of the EU are wheat and barley rather than maize, milo or cassava.

These economic and political effects tend to be predictable and viable alternative raw materials or feeding strategies can be developed. This then allows the livestock industry to maintain a competitive position in the market in which it operates.

However, when specific demands of powerful purchasers of feed or livestock products are met the effects might be of little impact, on a world basis, but are highly significant locally. The first signs of this occurring arose in the early 80s. A major High Street retailer in the UK issued a feed specification that was to be applied to all rations fed to broilers destined for their shelves. In this case the use of poultry offal meal and South American origin fish meal was excluded on the grounds of Salmonella contamination risk.

From this point onwards the restrictions imposed, usually for sound reasons, increased. The most significant impacts that occur are when a constraint is not universal across an entire market sector. The exclusion of a material from a feed miller's facility for one customer could add costs for another purchaser of feed, or having to hold two sources of a similar material has cost implications in terms of bin utilisation. Although, the technical solutions to these issues were usually straight forward, economically and commercially it is often problematic.

In 1988 the UK egg industry was dealt a devastating blow by the revelation that "sadly a high proportion of the laying flock is contaminated with Salmonella" (Edwina Currie, Parliamentary Under-Secretary for Health, 3rd December 1988, television interview). The repercussions were immediate and dramatic; sales of eggs fell as consumers were faced with their first real food scare. This was the first of several issues over the following years which shaped the use of raw materials as well as how animal feeds are manufactured today in the EU and in particular the UK.

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