Feed Bussiness Worldwide: October/November 2014

 

by Eric J. BROOKS

 

 

It is the hope of the world's food supply, yet maddeningly diverse and paradoxical. Compared to feed conversion ratios (FCRs) ranging from 2.0 for poultry to 8.0 for cattle, aquaculture FCRs of below are beyond compelling. Farmed salmon, for example, has an FCR of 1.2, whereas at 10.0 wild caught salm-on is less feed efficient than beef cattle. With its vastly efficient feed fundamentals, aquaculture has years of pent up growth ahead, but the exact amount is open to dispute.

 

For example, at The Aquaculture Roundtable Series (TARS) conference held in late August, 2013 world shrimp production estimates ranged from the Thai Frozen Foods Association's 1.8 million tonnes, Epi-core Bionetwork's 2.7 million tonnes to Cargill Animal Nutrition's estimate (based on 2011 FAO statistics) of 3.25 million tonnes.

 

Many discrepancies come from aquaculture's lopsided, unbalanced nature. China, a country not known for the accuracy of its statistics, accounts for approximately 70% of farmed fish production vol-ume, with the rest of Asia making up another 15% to 20% of the total. On the other hand, with high end species like salmon cultivated in the west, aquaculture production by value is less concentrated than raw production figures.

 

Even so, feed output does not follow fish farming output as closely as one would assume. According to a recent study by Grand View Research, global aqua feed production amounted to 37.0 million tonnes in 2013, and is expected to grow at an 11% annual rate through 2020, when it is expected to total 77.9 million tonnes. This is several times faster than demand for other animal feeds, which are slated to increase at rates ranging from 2% to 4%.

 

On the other hand, Grand View believes Asia accounts for 65% of world aqua feed production but nearly 90% of all farmed fish production. One reason for this particular wide variation is because with some species more feed efficient than others, their proportion of world aquaculture does not neces-sarily proportionate to their share of aqua feed demand.

 

Due to their popularity in China, Grand View estimates that carp (which is rarely eaten in the west) consume 25.6% of aqua feed output, followed by mollusks (22.6%), tilapia (10.8%) crustaceans (10.3%), salmon (9.3%) and catfish (5.8%), with other species making up the remainder.

 

Along with these imbalances, aquaculture, more than any other protein line, is prone to unexpected changes in the status quo. This has recently occurred in two leading species, one from the east, the other from the west. Thailand, a long time champion exporter was being challenged on cost but certainly not on its once prolific productive capacity. Chile, Norway's rival in salmon exporting, was once thought capable of equaling its Scandinavian rival's output before 2020.

 

Both assumptions have been overthrown: So much so that with shrimp output falling for two consecutive years, the unthinkable has happened. After watching its price fall below that of beef, Chile's inability to catch up to Norwegian production has put an end to an era of gently falling salmon prices. We examine what these recent market shake ups mean to the world's most popular eastern and western seafood lines.

 

 

The full report is published on the October/November 2014 issue of FEED Business Worldwide. To read the full report, please email to  inquiry@efeedlink.com to request for a complimentary copy of the magazine, indicating your name, mailing address and title of the report.