In 2014, the number of feed enterprises nationwide fell to around 9,000

Looking at feed output for the whole year, 2014 is expected to show slight growth. In 2014, the number of feed production enterprises nationwide will fall to around 9,000.

In 2014, the number of feed enterprises nationwide fell to around 9,000

It is already mid-December, and the 2014 feed market is about to close. Standing at the turning point linking to 2015, one cannot help but feel deeply moved. From feed ingredients to feed production, the entire industry seems to have been through a tough battle.

During this year, the feed ingredient and additive markets were far too restless: corn (15%), fishmeal (68%) and methionine surged (250%), while soybean meal, cottonseed meal and rapeseed meal also stirred up waves in the first half of the year, though fortunately the trend initially slowed in the second half.

The severity of this year's situation exceeded the enterprises' own expectations

The feed production market was also one wave after another. This year the hog market entered a downward channel from the Spring Festival period, reaching the year's low of 10 yuan/kg in the second quarter, with farmers suffering deep losses of more than 350 yuan per head; the poultry market continued to be shrouded in the shadow of H7N9 influenza at the start of the year; aquaculture suffered multiple blows in July-September from typhoons, low temperatures, severe convective weather and disease, and the peak season for aquatic feed production failed to boom. Under the above farming conditions, most feed enterprises saw their growth rate slow, and many enterprises saw their feed output decline. According to a large domestic feed enterprise, the severity of this year's situation also exceeded the enterprise's own expectations.

The feed industry won a tough battle

So this year our feed industry seems to have fought a tough battle, and gratifyingly, we won it. Looking at feed output for the whole year, 2014 is expected to show slight growth. Looking at the performance of large feed enterprises, although feed output growth slowed, net profit growth was relatively obvious. Some small feed enterprises will accelerate their pace of exiting the market. It is understood that in 2014 the number of feed production enterprises nationwide will fall to around 9,000. In regions such as Guangdong and Shandong, where the concentration of feed production scale is relatively high, the decline in the number of feed enterprises was relatively small, while in regions such as Hebei, where the degree of scale is relatively low, the decline was more obvious.

Moreover, in 2014, many features of our feed market became increasingly obvious. For example, feed industry transformation, industrial structure adjustment, extension of the industrial chain, strategic cooperation between ingredient suppliers and feed mills, embracing the internet, slowing feed output growth but rising profits, investing in overseas markets, attaching importance to the role of public opinion, and so on. Jingshu believes that it is precisely because we are in a severe situation that feed enterprises, and indeed the entire industry, have been forced into self-reform and adaptation to the environment. From the leading feed enterprises such as New Hope, Dabeinong, Tongwei and Haid this year, we can see that in 2014 our feed enterprises constantly innovated, dared to experiment, and dared to break conventions. The growth rate in this one year can be said to be twice that of previous years. Only a frog in boiling water can release a more powerful burst of energy.

The "new normal" of the feed industry

For 2014, we summarized the upstream ingredients and additives, and also reviewed the downstream hog, poultry and aquaculture sectors. Many times our thinking is confined within the few mountains right in front of us. Stepping outside the industry, we will find that it is not only the feed industry, but also steel, trade, clothing and so on, whose development pace has slowed, all undergoing trials large or small. The cause is the influence of our overall economic environment. Our entire overall economic environment has entered a "new normal." From the original high growth to the current medium-to-high-speed growth, GDP was 7.7% in 2013 and is expected to be around 7.4% in 2014.

As part of the market economy, the feed market is naturally affected by the overall environment. The Central Economic Work Conference was recently held and became a focus of domestic attention. The Central Economic Work Conference made clear that the "new normal" has become the major logic of economic development, seeking a balance between medium-to-high-speed growth and transformation and upgrading. The conference held that China's economy is evolving toward a stage with a more advanced form, more complex division of labor and a more reasonable structure; economic development has entered the "new normal," is shifting from high-speed growth to medium-to-high-speed growth, the economic development mode is shifting from extensive growth of the scale-and-speed type to intensive growth of the quality-and-efficiency type, the economic structure is shifting from mainly expanding incremental capacity to deep adjustment combining stock adjustment and optimization of increments, and the driving force of economic development is shifting from traditional growth points to new growth points. The direction in which our feed industry and enterprises are reforming and adjusting also matches the above points of the "new normal."

2014 is about to draw to a close. Whether we are willing or not, the wheel of the times will roll forward. 2015 will be another new journey.