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Feed and aquaculture opportunities challenge coexist
After nearly two decades of growth, China's feed and aquaculture industry has entered a phase of rapid expansion. The demand for feed is becoming more rigid, prompting a necessary restructuring of feed products. During the "2013 China Feed and Aquaculture Development Outlook" forum held at the "Seventh International Oils and Fats Conference," industry experts highlighted that while urbanization is accelerating and providing natural advantages for the sector, challenges remain alongside opportunities. If current issues are effectively addressed, the industry could sustain its fast-paced development. However, if not properly managed, it might face a new round of reshuffling and even regression.
The trend of rising feed prices is expected to continue. According to Professor Feng Dingyuan from South China Agricultural University, China is on track to surpass the U.S. as the world’s largest producer and consumer of feed. Last year, feed production in China increased by 11%, and this year’s growth is projected to reach 13%–14%. He explained that this increase is driven by several factors: in the past, livestock were often raised on free-range or agricultural by-products, but now, with fewer such resources available, commercial feed is required. Additionally, urbanization has boosted meat consumption, leading to greater demand for commercially produced feed.
Looking ahead, China’s feed production is expected to keep growing over the next 15–20 years, with costs also rising steadily. Although short-term fluctuations may occur, the long-term trend of higher prices remains unchanged. Li Xiaoyue, director of the Asian Department at Futong Stone Group, shared similar optimism, noting that as living standards improve, feed consumption is growing more rigidly each year. With rural urbanization trends, the future consumption focus will shift toward rural areas, where protein demand will be the main driver.
Regarding the supply and demand of soybean meal this year, Gu Zhong, General Manager of Haida Group’s Dahe Feed Co., Ltd., pointed out that domestic soybean meal supply has significantly increased compared to last year, with imports rising by 27 million tons. However, the key challenge this year is the high level of full-price feed materials and elevated pig stocks, which are linked to increased investment in pig farming. Meanwhile, the poultry sector is struggling, possibly entering a low point. Despite this, national reserve meat growth remains strong, and overall demand for soybean meal has still risen compared to last year.
The structure of the feed industry is also undergoing changes. As soybean meal prices fall, feed companies are increasing its usage in formulas. However, many companies lack advanced formula technology and are not fully responsive to price changes. While some use minimum-cost formulas, the proportion of soybean meal is often set arbitrarily, not always optimally. When prices drop, companies may increase usage without considering nutritional balance and cost efficiency. Those that adapt well can reduce costs, while others may make blind decisions.
As raw material prices rise and feeding structures evolve, the market share of premixes and concentrates is likely to shrink, while full-price feed gains more traction. Professor Feng noted that although China’s feed output is increasing, the proportion of premixes and concentrates reflects outdated production capacity. In regions like Guangdong, these products are rarely used. In the future, full-price feed and pig feed will see significant growth in market share.
At the same time, the structure of feed enterprises is also shifting. Small and medium-sized feed companies often lack R&D capabilities and rely on simple formulas such as “corn + soybean meal + fishmeal.†These companies have higher costs, limited ability to pass on expenses, and lower quality and safety standards compared to large firms. Large feed enterprises, leveraging advanced formula technologies and integrated supply chains, are gaining a competitive edge, widening the gap with smaller players. According to reports from the China Corn Network, many small feed companies may eventually be eliminated, leaving the market dominated by large private and multinational corporations. The influence of these multinational groups in China’s feed industry is expected to grow further.