Analysis of the Current Status of China's Feed Industry in 2014 and Development Recommendations
In the past two years, China's feed industry has developed rapidly, and the promotion and application of concentrated feed have become increasingly widespread, playing a role in promoting the improvement of pig farming production levels. With the development of e-commerce and the increase in various pig feed products and manufacturers, the concentrated feed market is gradually transitioning to the e-commerce market. More users and manufacturers are relying on livestock trade websites to display and trade feed and concentrated feed products, and to choose pig concentrated feed suitable for their own farming characteristics.
Reasons constraining the development of the feed industry
Low degree of intensification, with prominent homogenization. According to a feed industry market survey and analysis report released by China Report Hall, China has a large number of feed enterprises, characterized by workshop-style production, scattered operations, and single varieties with poor quality. The smallholder mentality of operators prompts manufacturers to work alone. Compared with large feed enterprises in countries such as the United States, the Netherlands, and Thailand, China's feed enterprises have considerable gaps in organizational scale, scientific and technological content, marketing management, and product research and development.
Mismatched development speed and trade barriers. There are two other reasons constraining the rapid development of China's feed industry: First, the development speed of the farming industry does not match the development speed of feed processing enterprises. At present, China's farming industry is still dominated by free-range farming, with a low degree of intensification and slow development speed, which has affected the further increase in the household penetration rate of commercial feed. Second, the issue of trade barriers for livestock products, such as the anti-dumping sanctions by the United States on China's shrimp products and Europe's restrictions on China's poultry meat exports. Due to trade barriers, it is difficult for livestock product exports to reach a higher level, and as a result, feed demand is naturally affected.
Vicious competition. Many feed enterprises, especially small and medium-sized feed enterprises, resort to unconventional competitive means in order to survive. For example, they falsely report nutritional content and exaggerate feed conversion rates to defraud users. Some enterprises also compete to raise the compensation of marketing personnel in order to recruit talent. In many feed enterprises with annual sales of more than 30,000 tons, marketing expenses have accounted for 60% of profits. To make up for this loss, some enterprises turn their attention to product quality, using inferior raw materials as substitutes and using as little expensive raw materials as possible. What is worse, some enterprises even use additives that are explicitly banned or restricted by the state in their products.
Development recommendations for the feed industry
Adhere to scale. As a basic manufacturing industry, feed enterprises can only have better competitiveness and risk resistance through large-scale operations. That is, in order to survive and develop in competition, they must take the path of scaling up.
Make full use of both markets. How big the heart is, how big the stage is. Opportunities only favor those who are prepared. For excellent domestic feed enterprises, in addition to cultivating their own domestic market, they should also actively plan for foreign markets. Compared with feed enterprises in Europe and the United States, in regions such as Southeast Asia, due to geographical factors, China's feed enterprises are at least not at a disadvantage when investing there.
Focus on efficiency. Today's feed enterprises are no longer characterized by "big fish eating small fish," but by "fast fish eating slow fish." Those well-known foreign feed enterprises are certainly large, but because they are large, their efficiency is inevitably affected. The key to high efficiency lies in unity of purpose. How to make an enterprise united in purpose is something that the owners of feed enterprises, large and small, should seriously consider.
As raw material price fluctuations moderate, the feed standardization system improves, good manufacturing practices for enterprises are established, feed quality and safety supervision is strengthened, and farming concepts and farming models gradually change, under the situation of gradual global economic recovery and stable and relatively rapid domestic economic operation, the feed industry will continue to maintain a stable, healthy, and relatively rapid development trend. It is predicted that China's pig feed output will reach 68.5 million tons in 2015.
According to the "Tenth Five-Year Plan for the Feed Industry and the 2015 Long-Range Objective Plan," China's demand for pig feed in 2015 will be approximately 75.42 million tons, and in 2015 there will still be a relatively large gap of approximately 7 million tons between the supply of pig feed and the demand for pig feed.