WORLD PERSPECTIVE
According to Alltech's 2024 Agricultural Food Outlook, global animal feed (AF) production was 1.29 billion tons in 2023, a slight decrease of 2.6 million tons, or 0.2%, compared to the 2022 forecast.
The total production of the top 10 countries accounts for 63.1% of global production (similar to 2022), with nearly half of the world's production concentrated in four countries: China, the United States, Brazil, and India.
North America: Recorded a decrease of 2.8 million tons (259.26 million tons, down 1.1%), with a significant reduction in beef feed production. The pig and dairy cattle sectors also saw a slight decline, but the poultry and pet feed sectors offset the shortfall. Poultry feed production increased by nearly 2.9%.
Latin America: Experienced growth of 2.46 million tons in 2023 (200.67 million tons, up 1.24%). Despite high production costs, geopolitical tensions, and changing consumer behaviors due to economic reasons, the region continues to lead global growth, primarily due to its export-oriented aquaculture, poultry, and pork markets.
Europe: Showed a trend of declining feed production, with a decrease of 10.07 million tons (253.19 million tons, down 3.82%) due to issues including the conflict in Ukraine and the spread of diseases such as African Swine Fever (ASF) and Avian Influenza (AI).
Asia-Pacific: Led growth in 2023, with an increase of 6.54 million tons (475.33 million tons, up 1.4%). Growth in ruminant feed production offset the decline in the aquaculture sector in the region. This region also includes several of the top 10 producing countries, such as China, India, Vietnam, and Japan.
Africa: Showed slow growth at 1.95%, equivalent to nearly 1 million tons, raising the total production to 51.42 million tons.
Middle East: Experienced a slight decrease of 0.12 million tons (35.93 million tons, down 0.32%).
Oceania: Had the third-highest growth rate, at 3.71% or 0.39 million tons, out of a total of 10.78 million tons.
DOMESTIC PERSPECTIVE
In 2023, the Vietnamese animal feed market is heavily reliant on imports.
In recent years, the Vietnamese animal feed market has achieved significant milestones and successes, making Vietnam one of the fastest-growing animal feed markets in the region, with an annual growth rate averaging between 13% and 15%. This has positioned Vietnam as the 10th largest animal feed producer in the world and the leading producer in Southeast Asia.
The total demand for feed ingredients (such as corn, soybean meal, fishmeal, bran, etc.) in Vietnam’s livestock sector is approximately 33 million tons per year. However, domestic production can only supply about 13 million tons annually, which accounts for about 35% of the total demand. The remaining quantity primarily depends on imports, which constitute approximately 65% of the total demand.
In 2023, China is the largest importer of animal feed (AF) from Vietnam, accounting for an average of approximately 50% of Vietnam's animal feed export structure.
The largest imports of livestock feed and ingredients come from Argentina, which accounts for 27.2% of the total import value of this commodity group in the country, reaching nearly 1.35 billion USD, a decrease of 19.4% compared to 2022. Following Argentina are Brazil (with an 18.5% share) and the United States (15.4%)
In 2023, there are 267 animal feed mills in Vietnam, including 177 mills owned by domestic enterprises and 90 mills owned by foreign companies.
However, in terms of production volume, animal feed from foreign mills accounts for more than 80% in 2023, specifically 13.2 million tons from foreign companies and 7.3 million tons from domestic companies.
The production volume of animal feed from domestic companies has been gradually decreasing over the past three years, from 2021 to 2023
The production volume of animal feed from domestic companies has been gradually decreasing over the past three years, from 2021 to 2023. Animal feed is a crucial input in livestock farming in general and pig farming in particular, accounting for about 60-70% of production costs.
According to a report by market research firm Mordor Intelligence, the market size for compound animal feed in Vietnam is expected to increase from USD 11.54 billion in 2023 to USD 15.30 billion by 2028, with a compound annual growth rate (CAGR) of 5.80% during the forecast period (2023-2028).
Foreign companies are actively expanding in Vietnam:
- De Heus (Netherlands): 23 animal feed processing mills - currently the largest company in Vietnam in terms of scale, production, and revenue in the independent animal feed market.
- Cargill (USA): 11 animal feed processing mills
- CP (Thailand)
- Haid (China), CJ (South Korea), Mavin (Australia), Japfa (Singapore), BRF (Brazil).
Approximately 60% of facilities have invested in advanced technology and automated production lines. Additionally, 20% of facilities are at a semi-automated level, and only about 20% of facilities operate manually with a designed capacity of less than 30,000 tons per year. Over 80% of facilities have implemented at least one quality management system, such as ISO, GMP, HACCP, or equivalent.
C.P Vietnam is the largest animal feed manufacturer in terms of capacity (approximately 4.5 million tons per year) and also leads in domestic revenue (85,000 billion VND).
Additionally, other companies with impressive revenues include Cargill, De HEUS, CJ VINA, JAPFA, and others.
In the annual Agricultural Commodity Market Outlook report by Rabobank, the global agricultural commodity market is expected to cool down in 2024. Although the situation has not fully recovered, the outlook for the agricultural commodity sector is significantly more positive compared to previous years. Domestically, the Department of Livestock forecasts that the prices of raw materials and finished animal feed will continue to trend downward through early 2024.
Given the expected cooling of raw material prices, nearly half of the experts and companies surveyed in the industry express optimism, anticipating a more favorable growth outlook for the animal feed sector in 2024 compared to 2023. One of the main factors driving growth in the animal feed market is the increasing demand for animal-based food products such as meat, milk, and eggs
Source:Department of Animal Husbandry, Animal Husbandry Journal, USDA & TPS Research Compilation, VIRAC - Compiled by Virtus Prosperity.
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