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THE FEEDINFO Feedinfo Summit SUMMIT EDITION 2023 Recap Unlocking the future of animal nutrition HILTON VIENNA PARK, AUSTRIA 20-22 SEPTEMBER 2023

LIVED SUSTAINABILITY

NUTRITIONAL VARIANCE

AQUACULTURE

What it means for operations and supply chains

Raw material analysis and formulation tech can help

Knowledge-sharing builds new global markets

Pages 8 - 9

Pages 12 - 13

Pages 16 - 17

YOUR CONNECTION TO THE GLOBAL ANIMAL NUTRITION AND FEED INDUSTRY

FROM THE MANAGING DIRECTOR Welcome to the AUTUMN POST-SUMMIT 2023 edition of Feedinfo Review

A place for connections The Feedinfo Summit is a forum to deep dives into the Chinese, American, promote conversation, make meaningful European, and other regional markets. connections, and spark innovation in the Additionally, as part of its mission to animal nutrition value chain. challenge established thinking, this year’s Set in stunning Vienna, the 2023 event Summit was co-programmed with the brought together industry leaders and Women in Food and Agriculture initiative. subject-matter experts This allowed attendees from across the globe. to participate in The on-stage discussions about discussion was both the progress to be expansive and rich in made on transforming practical detail. From executive leadership in macroeconomic trends the agri-food industry, and risk management, share learnings on to food industry trends how to attract diverse and grains market talent and run inclusive outlooks, to a discussion teams, and ponder the about sustainability challenges of navigating and the EU’s Green majority-dominated New Deal and a panel workspaces. about animal epidemics Beyond the including HPAI and programming, the event Elisabeth Mork-Eidem, managing director of was also widely lauded ASF, day one of the communication and events for Mintec conference took the for its networking industry’s pulse on the most pressing potential, with participants appreciative issues facing feed manufacturers, their of the “opportunity to meet all [of the] customers, and their suppliers. It also important people in the industry” and of separated into breakout sessions, where the “many new contacts and connections” more interactive discussions on new it provided. sustainable feed formulation concepts, “With the increasing demand for alternative feed ingredients, industry sustainable solutions, heightened consolidation, and the potential of petfood. consumer awareness, and advancements Day two, meanwhile, brought together in technology, our industry stands at the insight from across the value chain, with crossroads of transformation,” observed panels representing producers of various Spencer Wicks, CEO of Feedinfo’s parent species, as well as breakout sessions for company Mintec. “The animal feed and nutrition market has never been more dynamic, and our shared goal is to navigate these complexities while unlocking the potential for growth and innovation.”

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Autumn 2023 Senior editor: Shannon Behary Design and Layout: Julianne Abrams Glenn Juszczak Content contributors: Heather McGuire Doyle Lydia Ma Karolina Zagrodna Simon Duke Perspectives manager: Elisabeth Mork-Eidem Magazine promotion: Luke Bailey House ad production: Jeanne Ferrer Luke Bailey Jo Goodwin Magazine production: Melissa McChesney To discuss advertising or Perspectives partnerships: Lisa Guiraud lisa.guiraud@feedinfo.com +33 6 37 46 86 47 Ben Cronin ben.cronin@agribriefing.com +44 7 780 47 47 63

Feedinfo Review (ISSN 1777-5566) is a Mintec (formerly AgriBriefing) publication. Copyright ©2023. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical including photocopying, recording, or any information storage or retrieval system without the express prior written consent of the publisher. The contents of Feedinfo Review are subject to reproduction in information storage and retrieval systems.

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SUMMIT EDITION

CONTENTS FEEDINFO SUMMIT 2023 Unlocking the future of animal nutrition FEEDINFO SUMMIT Senior leaders talk industry resilience amid economic and structural challenges............................................. 6 INDUSTRY PERSPECTIVES What does “lived sustainability” mean for Leiber............................................... 8 BREAKOUT SESSION Evonik: urgent action is needed on nitrogen emissions............................. 10 INDUSTRY PERSPECTIVES Adisseo’s raw material analysis & formulation technology helps solve rising nutrition variability issues......... 12 FEEDINFO SUMMIT SPONSORS.... 14 INDUSTRY PERSPECTIVES USSEC supports knowledge-sharing in global aquaculture to build up new markets for U.S. soy.................... 16 FEEDINFO SUMMIT Animal producers overstretched by cost, labour, disease, regulation, and the sustainability conundrum............. 18 Freight challenges loom due to capacity surplus.................................. 18

AI, CRISPR, & cell-based meat sparking innovation in animal nutrition............. 20 Calysseo nears commercialisation of fermentation-derived protein product.................................... 20 Feed additives in 2023: price, supply, and demand developments................ 22 Information, cooperation and diversification key to tackle supply chain hurdles....................................... 24

Extreme weather and geopolitical tensions drive global rapeseed and soybean markets................................. 24 BREAKOUT SESSIONS AND PANEL Adisseo’s CEO sees Chinese feed leaving chaotic period behind............ 26 Amid growing EU regulatory burden, feed industry should watch out for “horizontal” directives too.................. 28 Alt proteins could change the world, but need feed industry partners......... 30 Experts explain LATAM’s potential and pitfalls........................................... 31

HILTON VIENNA PARK, AUSTRIA 20-22 SEPTEMBER 2023

COMPANIES APPEARING IN THIS ISSUE | BOLD ENTRIES ARE CLICKABLE Adisseo............................. 3, 12, 13, 20, 22, 26 Agrifirm............................................................. 24 Alltech..................................................................6 Argenta Group.................................................. 28 AVEC................................................................. 18 Biocraft............................................................. 20 Biofractal.......................................................... 20 Blonk Consultants............................................ 17 Calysseo........................................................... 20 Calysta.............................................................. 20 Cargill......................................................6, 27 CHR Olsen........................................................ 31 CJ...................................................................... 22 Danisco Animal Nutrition & Health (IFF)....... 19 De Melktapperij................................................ 18 dsm-firmenich................................ 5, 7, 30, 31 EPPA................................................................. 28 Evonik Animal Nutrition.................... 10, 11, 22 Feedprofessionals........................................... 31 Fufeng............................................................... 22 4 | AUTUMN 2023

JBS.................................................................... 18 Le Gouessant......................................................6 Leiber GmbH........................................ 8, 9, 23 Lifosa................................................................ 23 Miloubar...............................................................6 Mintec............................................................... 24 Mountaire Farms.............................................. 18 NHU............................................................. 22, 31 Novus International............................ 6, 21, 22 Pathway Intermediates.................................. 7 Pen & Tec.......................................................... 28 Phileo.......................................................... 29 Salmon Group............................................ 18, 24 Sea-Intelligence................................................ 18 Unibio.......................................................... 30, 31 University of California, Davis......................... 20 UOB................................................................... 24 USAID................................................................ 17 U.S. Soybean Export Council (USSEC).....16, 24 Vetagro....................................................... 25 www.feedinfo.com

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FEEDINFO SUMMIT

Senior leaders talk industry resilience amid economic and structural challenges There are many worries keeping a decision-maker in the animal nutrition industry awake at night, from the acute pressure created by inflation to the slow burns of sustainability and strategic resilience. In a detailed discussion capping off the 2023 Feedinfo Summit in Vienna, executives from across the industry shared thoughts on how their companies are adapting, and what is in store for the future.

THE MACROECONOMIC ENVIRONMENT Adapting to sky-high input costs, especially when prices for the final protein products are in many cases rather low, is a critical challenge for several. Cargill Animal Nutrition President Adriano Marcon noted: “Your margin over feed cost that you used to have in the industry doesn’t hold up anymore. It’s a new day, after inflation. So pricing management is really fundamental to secure the economic sustainability of our organisations in the future.” For Irit Ben-Dov, CEO of Israeli feed and commodities trading firm Miloubar, the immediate concern is not her part of the value chain, which is, after all, notably working capital-intensive. “Our main concern comes down to our customers’ ability to overcome the situation,” she said, adding that smaller operations are facing financial stress, and potentially closing down their businesses

or selling to bigger players. “Eventually this leads to a more centralised market with less competition. It’s not easy to be a farmer these days, in our country.” Alltech’s CEO Dr. Mark Lyons agreed that facing challenges like this requires collaboration with both upstream and downstream partners. “It’s really [about] building the relationships with suppliers, not just customers. I think that’s a big shift. In a lot of businesses, we’re focused on supplier relationships, and managing this together.”

RESILIENCY AND FUTURE-PROOFING Looking ahead, what kind of new challenges do the executives see on the horizon, and how should the industry prepare for them? For Remi Cristoforetti, CEO of French livestock farming co-op Le Gouessant, the pressure of filling increasing numbers of vacancies as his workforce ages is one that looms large. “When I look at the distribution of ages in my company, I have more than 1/3 of the people who will leave the company in the next 10 years. In the last three years, I lost a thousand years of experience.” Over at Novus International, President & CEO Dan Meagher is focused on the implications of deep structural evolutions in the industry. Noting the excess capacity in a lot of feed additive segments, he said, “you probably need to be thinking about consolidation, mergers, being creative about how we can do

Caption © Courtesy of Feedinfo

6 | AUTUMN 2023

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FEEDINFO SUMMIT

WE’RE FOCUSED ON SUPPLIER RELATIONSHIPS, AND MANAGING THIS TOGETHER.” DR. MARK LYONS business together, instead of trying to recreate the wheel all the time. How do we combine resources, geographies, people, [and] technologies?” In response to a question about concerns over the stability of the Chinese economy, he said: “I don’t think that [it’s possible to] not be concerned.” Ultimately, the worry is about whether there is too much dependence on a single link in the supply chain for essential feed additives. “China needs to be successful. But I also think we need to understand the discipline that needs to come into the overall global industry, and I think we need to look at ensuring options [are available.]” Indeed, ensuring that the animal nutrition industry has a wide range of options at its disposal is critical to dsm-firmenich’s vision of resilience. As explained by Christie Chavis, Vice President of Animal Nutrition and Health, the disruption caused by the war in Ukraine highlighted the importance of having access to and knowing how to formulate with alternative raw materials, from algal oil to single-cell proteins. “[It’s important to] really

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think through, when future-proofing the business, what are those alternative raw materials, what will that look like as the [geopolitical] situation may change.”

SUSTAINABILITY, BOTH ECONOMIC AND ENVIRONMENTAL There are, indeed, any number of promising new technologies to help the industry face future challenges, from supply chains to sustainability. However, noted Marcon, the low prices for eggs, milk, and meat are making it difficult for companies to spend much time thinking about or preparing for the future. “Margins in the animal protein sector aren’t great. So, we are worried about the growth of the industry, and the required investments that the industry needs to make and isn’t making because the growth just isn’t there.” Cristoforetti also pointed out a “kind of schizophrenic behaviour of the consumers” who ask for additional sustainability attributes in their animal protein products but who continue to trade down to mainstream products. Resolving the tension between producing at a competitive price and maintaining a high-value production sector is a difficult proposition. “We have to balance very carefully.” For Chavis, meanwhile, there is a greater opportunity than ever before to boost the credibility of the industry by putting quantitative measurements behind the sustainability claims it is making. Faced with a public — and policymakers — increasingly sceptical of greenwashing, she says, “for 2024, this is something that I think needs to be front and centre.” By Shannon Behary, senior editor

AUTUMN 2023 | 7

INDUSTRY PERSPECTIVES | Sponsored

What does “lived sustainability” mean for Leiber On 6 March 1954, Franz Leiber founded the company “Bierhefeverarbeitungsgesellschaft Franz Leiber & Co.” in Damme. A scion of the family behind the 150-year-old I.F. Leiber agriculture firm and deeply connected with the agri-food industry, Franz was interested in harnessing the still little-researched vitamin B complex in brewer’s yeast to support growth in livestock. Nearly 70 years later, Leiber GmbH remains dedicated to the Helge Jakubowski mission of promoting this highly nutritious feed supplement, helping to bring its benefits to a wider range of animal diets. Moreover, as explained by Helge Jakubowski, Global Sales Director, and Petra Bisesti, Product Management Livestock, the company’s focus is squarely on the future, with investments in carbonlight energy generation and in making certifiable progress on improving the sustainability of its operations and supply chains. In Leiber’s view, with the concept of the circular economy at the forefront of discussions about European agriculture, running an upstanding business providing an upcycled animal nutrition product is more relevant than ever. [Feedinfo] Leiber has been around since 1954. What have been the major milestones for your company since that time? [Helge Jakubowski] A breakthrough for the company and for the category of brewer’s yeast in animal nutrition came in 1964 with the patented, ingredient-conserving drying process. With its own research and development, Leiber promoted the acceptance of brewer’s yeast ingredients, now widely recognized as important elements of feed. In 1989, the company headquarter was relocated from Damme to the production site in Bramsche. Alongside the brewer’s yeast extraction plant here, a new business branch was created in 1994 to develop and produce high-quality yeast extracts for our customers.

In 2003 and 2009 Leiber opened two subsidiaries: one in Poland and one in Russia. Three cutting-edge spray-drying facilities and the new extraction plant were put into operation between 2010 and 2017. In terms of milestones for the future, Leiber is building a biomass power plant at the moment, a step forward in the generation of CO2-neutral energy. At the end of 2023 the Business Units Life Science and Animal Nutrition will move to a new administration building with R&D laboratories directly alongside the production facilities in Bramsche-Engter. [Feedinfo] Walk us through your portfolio. What distinguishes Leiber from other brewer’s yeast companies serving the animal nutrition industry? [Petra Bisesti] Leiber stands for innovative products that ensure beneficial effects on digestibility, palatability, welfare, and performance. For a medium sized, family-owned company with German values and state-of-the-art technologies, high quality is the top priority. Our product range consists of unextracted brewer’s yeast, brewer’s yeast bound to functional fibre, autolyzed yeast, yeast cell walls, purified ß-glucans, natural yeast extracts and spent grains. While spent grains are mainly used as protein source in dairy cattle feed, brewer’s yeast is a versatile raw material for animal nutrition. It provides highly available nutrients and active substances like amino acids, minerals and vitamins. Yeast cell walls consist of prebiotic and immune-stimulating components. It’s an efficient tool in feed to stabilize gastro-intestinal health, metabolism and immunity, to reduce harmful effects of mycotoxins, and to partially replace protein sources like fishmeal or soybean with a natural and sustainable alternative. Our production processes and workflows are continuously optimised to improve efficiency and to generate as little waste and emissions as possible.

THE AIM IS A 50% REDUCTION IN CO2 EMISSIONS BY THE END OF 2024 THANKS TO THE OPERATION OF OUR NEW BIOMASS POWER PLANT, AND TO ACHIEVE NET ZERO AT LEIBER’S GERMAN PRODUCTION SITE IN BRAMSCHE-ENGTER BY 2030. HELGE JAKUBOWSKI 8 | AUTUMN 2023

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Sponsored | INDUSTRY PERSPECTIVES Since the foundation of the company nearly 70 years ago, sustainability has been in our DNA. We process side streams and co-products from breweries into high-quality brewer’s yeast products for a wide variety of applications. We give brewer’s yeast a second life. However, to be sustainable as a company, it is not enough to have a sustainable product on the market. There is much more to it: Living sustainability within the company and integrating it into corporate processes. [Feedinfo] What does the term “lived sustainability” mean for Leiber? How is it exemplified in the Leiber strategy and portfolio? [Helge Jakubowski] At Leiber, we are conscious of our responsibility towards others, so we have designed a business model that helps to conserve resources, use water, energy and raw materials sparingly, and avoid emissions. We keep these objectives in mind at all times. At its core, Leiber is built around a sustainable idea: the concept of “upcycling” or refining brewer’s yeast into innovative products for humans and animals. Beyond this, Leiber has identified specific fields of action and defined targets for its supply chains, CO2 reduction, management culture, and employee health and well-being. For several years now, we at Leiber have been working on making our processes more sustainable in the environmental, economic and social areas. This is primarily driven by our sustainability team and the specialist departments involved. We are officially certified under the “ZNU Sustainable Business Standard”. This means that Leiber continues to make measurable progress on key sustainability issues at its sites and along our value chains, thus making a committed, ongoing contribution to sustainable transformation in society. Moreover, we integrate environmental and social aspects into our procurement processes and decisions, beyond simply looking at economic factors. These principles are set out in our Code of Conduct and are regularly monitored in internal and external audits. The values in the Code of Conduct guide us in our work every day. [Feedinfo] Tell me about the ZNU Sustainable Management certificate. What is this program? When did Leiber achieve certification? How has it driven further sustainability improvements since then? [Petra Bisesti] In June 2022 Lacon GmbH officially confirmed for the first time that Leiber meets the requirements of the standard ZNU Driving Sustainable Change. So far, 168 sustainability measures have been and are being implemented for the sustainability project. Leiber introduced a Code of Conduct regulating how to deal with corruption, forced and child labour as well as the principles

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of social responsibility, such as human rights, anti-discrimination and environmental protection. An anonymous whistle-blower system for violations was also implemented, and mandatory compliance with this Code of Conduct was communicated to employees and business partners. Our goal was to have concluded binding agreements to comply with this Code of Conduct with 80% of our strategically important suppliers (those with annual sales of at least 100,000 euros to our company) by the end of 2022. This goal was approximately achieved at the end of 2022 (75%). For 2023, this goal is being extended to strategic suppliers that generate minimum annual sales of 50,000 euros with our company. Beyond this work in partnership with our suppliers, this program has also included work on company culture and initiatives to support the health and well-being of our employees. We are proud to Petra Bisesti say we are on-track to either achieve our targets in these areas in 2023, or indeed to increase those we have already met. [Feedinfo] By the end of the year, Leiber expects to bring online its new EUR 14 million biomass power plant. How much of an improvement to your CO2 footprint will this bring? Where is the biomass to fuel it sourced from? [Helge Jakubowski] Leiber assessed its carbon footprint for the first time back in 2021, thereby creating the basis for clearly tracking future changes. Specific measures such as the construction of the biomass power plant have been planned in order to reduce CO2 emissions. Untreated waste wood is to be used above all to generate electricity and steam for concentrating and drying brewer’s yeast. The aim is a 50% reduction in CO2 emissions by the end of 2024 thanks to the operation of this biomass power plant, and to achieve net zero at Leiber’s German production site in BramscheEngter by 2030. [Feedinfo] How is Leiber pursuing “lived sustainability” in other aspects of its business? What should the market expect to see out of Leiber going forward? [Petra Bisesti] The ultimate goal is a circular economy that uses resources sustainably. Our contribution to this is to continue developing our processes and procedures so as to conserve our planet’s resources. To keep our business healthy and sustainable in the long term, we conduct our R&D activities with commercial partners as well as science and research organisations. Leiber R&D work focuses on using by-products from the food industry to create new products and applications that benefit people and animals. We work every day to get more out of these by-products. Published in association with Leiber GmbH

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BREAKOUT SESSION | FEEDINFO SUMMIT

Evonik: urgent action is needed on nitrogen emissions One of the many ambitious environmental goals of the EU’s Farm 2 Fork strategy is to halve nutrient emissions into the environment by 2030 versus a 2015 baseline. To quote Faazi Adam, Director of Sustainability for Animal Nutrition at Evonik, “2030 is not that far away, and 50% is a very large number.” Adam was speaking to a breakout session of the Feedinfo Summit 2023 in Vienna, alongside her colleague Gaetano Blanda, Head of Animal Nutrition Business Line, about the topic of nitrogen emissions — the harms they cause to the environment, and the role the animal nutrition industry can play in reducing them. The difficulty with nitrogen, explained Blanda, is that on the one hand, it is an essential element for agriculture — arable farmers need nitrogenbased fertilizers, and of course livestock farmers must feed protein for animal growth — but on the other hand, an overabundance of nitrogen can cause threats to the local ecosystem. Waters might suffer from acidification or eutrophication (which is, broadly speaking, an overgrowth of certain types of algae which suffocate other life forms); nitrogen emissions can cause acid rain, which has harmful effects on both man-made and natural environments; and certain nitrogen-based pollutants are even contributing to climate change. Indeed, nitrogen is one of the nine planetary boundaries identified by scientists in recent years. In other words, just as there are limits to the carbon dioxide that we can emit before severe environmental consequences can occur, “if you go beyond a certain point in [nitrogen emissions], you can create distress, you can create abrupt and irreversible changes in the ecosystem.”

Still, he acknowledged, in light of a growing global population, we need to make sure we continue to offer affordable protein. That means being smarter about how we feed animals. “We can tackle [nitrogen emissions] a bit by using precision nutrition. If we were able — and we are able — to measure exactly how much nitrogen is needed to have the optimum growth of an animal, then really we could use only the minimum of nitrogen in [feed],” he asserted. This transformation would require three steps. The first is to quantify exactly how much protein an animal needs — in other words, to identify the perfect diet. The second is to analyse the content and bioavailability of the nutrients in the raw materials you are feeding. And the third is to optimise the diet, so as to avoid over-feeding, giving the animal exactly what it can use, so that less excess is excreted. © Courtesy of Evonik “We need to make use of amino acids as a supplementary ingredient. This is one concept we believe can reduce [nitrogen emissions] much.” Not only would such a concept lower the nitrogen emissions of animal production, but also, by reducing the crude protein needed in the diet, it would cut the amount of land and fertilizer needed to produce the feed by around 10%, he asserts. Meanwhile, greenhouse gas emissions could be lowered by around 9% in swine and 13-14% in different kinds of poultry. “I have the impression that this topic is somehow not recognised at this moment in the industry, [but] from our point of view, it’s quite important.” By Shannon Behary, senior editor

IF YOU GO BEYOND A CERTAIN POINT IN NITROGEN EMISSIONS, YOU CAN CREATE ABRUPT AND IRREVERSIBLE CHANGES IN THE ECOSYSTEM GAETANO BLANDA 10 | AUTUMN 2023

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BECAUSE IT’S ABOUT

ADDED VALUE Fully on track to carbon neutrality – Biolys® production in Castro, Brazil. Reducing the carbon footprint becomes increasingly important for feed producers. With a minimal carbon footprint of 0.06 kilograms of CO2 equivalent per kilogram of product, Biolys® produced at Evonik’s Castro site helps achieving this goal. It’s nearly carbon neutral and uses over 90 percent renewable energy sources for a waste-free process – and it’s certified by TÜV Rheinland. Our next goal: full carbon neutrality. Sciencing the global food challenge. | evonik.com/biolys

INDUSTRY PERSPECTIVES | Sponsored

Adisseo’s raw material analysis & formulation technology helps solve rising nutrition variability issues

Variation in nutritional values within the same feed ingredient is a well-known issue and can be a significant problem for feed companies. Even a change geographical origin, and therefore potentially of variety, climate, harvesting or storage method, will result in significant variations, compounded by potential weather phenomena. There are multiple issues caused by increasing raw material variability, says Florian Bastit, global technical manager for PNE (Precise Nutrient Evaluation) at Adisseo. The main ones concern money wasted in formulation (overfeeding) and in the field (counter-performance due to underfeeding, excess anti-nutritional factors, dysbiosis, unbalanced feeding, etc.). High variability will also potentially increase reformulation frequency, he warns. Adaptability and responsiveness are the keys to successfully overcoming these variations, and in this Perspectives article, Mr Bastit and his colleague Angélique AN BA Cayzac, global technical manager for feed ST I T formulation, discuss the technologies Adisseo has

developed to help its customers address these issues. [Feedinfo] These days, NIR (near infra-red) analysis tools are widely used in feed mills for raw material analysis and to provide information to build consistent rations. NIR offers advantages over the previous reliance on wet chemistry, but are feed mills using NIR to its maximum capability, or could more be achieved? [Florian Bastit] NIRS predictions have many advantages, and the technology is complementary to a control plan based on wet chemistry. The use of NIRS is a classic investment/benefit/risk rationale for companies. Are they equipped with a NIRS instrument? Do

they have trained staff with sufficient time to devote to NIR results analysis? What type of nutrients do they need in formulation; proximal only or digestible amino acids? Adisseo strives to provide a unique service that is sufficiently extensive and flexible to meet most needs that a nutritionist, formulator, quality controller or buyer may encounter in terms of qualification of raw materials received in the plant. This service has the capacity to process thousands of samples every week, with a wide range of parameters. These parameters come from in house calibrations based on wet chemistry as well as — and this is the uniqueness of Adisseo — in vivo digestibility assays for energy and amino acids. Unfortunately, some companies are limited by a lack of time and personnel dedicated to NIR results analysis. Logistics and infrastructure need to be put in place around the machine, for proper and regular sampling, and for identification and storage of raw materials as they arrive at the plant. Nevertheless, as a formulator and nutritionist, I am convinced that the return on investment far outweighs the constraints associated with deploying a functional NIRS on a large scale. [Feedinfo] How does the variability within raw materials and the use of NIR tie in with feed mills’ ration formulation software? Do they combine seamlessly to produce cost-effective rations which achieve their aim? [Florian Bastit] It’s all about managing the safety margin during the feed formulation process. As a formulator, you absolutely want to create a feed that meets the animal’s needs within the framework of a production objective clearly defined upstream, and

THE ADVANTAGE OF OUR SYSTEM IS THAT IT WILL ADAPT TO OUR CUSTOMERS’ NEEDS, FROM THE SIMPLEST (FOR PROXIMAL-BASED FORMULATION) TO THE MOST ADVANCED (FORMULATION BASED ON IN VIVO DIGESTIBILITY).

FLORIAN BASTIT 12 | AUTUMN 2023

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Sponsored | INDUSTRY PERSPECTIVES at the lowest possible cost. You therefore need to manage the finest possible safety margins to avoid producing a feed that is too expensive in relation to requirements. NIRS is perfectly suited to this objective. It’s a fast, inexpensive and reliable analysis method which can be automatically integrated into control plans and LIMS-type software via webservices. The NIR also offers a very varied panel of analyses covering the nutrients commonly used for most livestock species. What makes the Adisseo ecosystem unique is that it offers our customers and partners access to predictions based on in vivo models for the prediction of energy and digestible amino acids in poultry. These models are based on databases produced within CERN (Center of Expertise and Research in Nutrition) based on reference methods by Bourdillon et al. for energy, and Green et al. for digestible amino acids. The NIR therefore makes it possible to directly predict the digestibility of key nutrients in raw materials by avoiding the use of coefficients to estimate this same digestibility. [Feedinfo] Can you talk us through what your own NIRS ecosystem offers, and how this would fit in to the technology currently used by feed mills?

[Florian Bastit] Today, we offer a service called PNE for Precise Nutrition Evaluation. It is an easily accessible NIRS system with the ability to predict most of the raw materials and the nutrients used on a large scale in a feed mill. The advantage of our system is that it will adapt to our customers’ needs, from the simplest (for proximal-based UE formulation) to the most advanced (formulation CA YZA C based on in vivo digestibility). We provide webservices to enable our customers to connect our tool directly to their LIMS or other in-house software. In this way, our analysis system integrates seamlessly into their way of working. GÉ

[Feedinfo] Not all of the nutrient values used to formulate feed can be analysed, and many have to be calculated. Can you discuss where your new calculation tool, ADICT, will help in this respect, and what will it do? [Angélique Cayzac] Our PNE tool gives a value for many nutrients used to formulate feed. However, some nutrients cannot be predicted and must be calculated to use them in the formulation software — ADICT (ADIsseo Calculation Tool) uses equations to fulfil the missing values. For instance, energy values for pigs are calculated via an equation, but using the values predicted by PNE for the parameters in this equation. To do this, we rely on the FEEDINAMICS system (equations developed by a consortium of scientists from INRAE, CIRAD and AFZ). With PNE used worldwide, we see that some customers have created a lot of data, but these data were not being used which is a pity since the added value from PNE was lost. This is why ADICT was developed: to help our customers use their PNE data to formulate their feeds.

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The two tools are able to communicate via an API. A request allows the ADICT user to import PNE data from a specific period, for a specific origin or supplier, depending on the customer’s requirements. Once the filters are applied, ADICT calculates the average of the PNE results available, then the missing nutrients. Users can export the data to integrate them into their software. Several files are available, making this tool compatible with a range of formulation programs. ADICT contains equations for more than 100 raw materials, meaning customers can calculate a matrix for an ingredient not available in PNE but for which they have analytical parameters from another lab. [Feedinfo] Can you talk us through an example where the technology has combined to deliver a much better result financially and technically for customers? [Angélique Cayzac] We have feedback from customers globally that this complete solution is useful in their daily job, saving time updating raw materials matrices and improving formulation accuracy. Recently, a broiler integrator customer from MEA told us that thanks to PNE and ADICT, he improved batch homogeneity and reduced the production cycle by more than one day. While feed price was not always cheaper when formulating with PNE and ADICT, better performances compensated for this, and brought savings. We have ongoing trials in a commercial farm using this Adisseo solution to formulate feeds. Field results show that even in a moving environment (not experimental conditions), our solution works very well. [Feedinfo] How much is cost driving what feed mills, and their customers, do now? Has it become a much bigger focus, and if so, how do you think companies can best deliver quality, performance and value? [Angélique Cayzac] Producing feed, or producing an animal such as a chicken or pig, at a given quality and lowest cost is always the driver for companies. With the recent crises (Covid, the Ukraine war and its impact on energy costs), the slightest mistake or approximation can be expensive. For instance, with recent high prices of cereals and oil, the cost of 10kcal in a broiler feed (an indicator often checked by companies) increased by almost 50%. So, for a feed mill, managing raw material variability and the safety margin is key to performance. Our key driver is solving customer issues in their daily work, making their job easier and help them improve performances. As part of this, we have many new projects in the pipeline, including a new user interface, and will be discussing them in coming months. Published in association with Adisseo

AUTUMN 2023 | 13

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USSEC supports knowledge-sharing in global aquaculture to build up new markets for U.S. soy Another constraint to feed-based fish farming in the mid-1990s The U.S. Soybean Export Council (USSEC) has for years represented the soy supply chain in the United States: the farmers, was the poor quality of manufactured fish feeds in China. Feed mills used the same pellet mill processors, commodity shippers, equipment, feed ingredients merchandisers, and allied and vitamin and mineral preagribusiness and agricultural mixes for fish feeds that they organizations. Not only are they used for poultry, swine and other monitoring the soy situation in U.S. Soy Industry Leadership in Soy‐Optimized Aqua Feeds and Production Technologies animals. These feeds had two the U.S., but they have enabled USSEC works with the feed-based aquaculture industry to improve the use of soy, particularly U.S. Soy, in aquafeeds. USSEC works with aquaculture nutritionists, formulators, and feedmills to create high-quality, efficient, and profitable major drawbacks: 1) they were easier access internationally aquafeeds that meet the nutritional needs of many different species, while also meeting the increasingly stringent market requirements for certified aquaculture products using sustainable ingredients like U.S. Soy. USSEC also has played an active role in education and developing feed-based aquaculture production systems around the world. not nutritionally balanced for fish, to U.S. soy for various uses The following timeline summarizes U.S. Soy’s role over the last 40 years. and 2) the feeds had extremely including human consumption, 1980s U.S. Soy industry initiates Soy in Aquaculture program in Southeast Asia. poor water stability. These two livestock feed, and as discussed Aqua program focus moves to China, the largest aquaculture producer. U.S. Soy issues contributed to poor fish here, aquaculture. 1989 conducts technical seminars in China on principles of modern aquaculture and feed‐ based technologies in collaboration with Chinese experts. performance and resulted in USSEC has implemented significant water quality issues in educational programs across Program focuses on soy‐optimized feed technologies in China, including 1990s 80:20 pond technology and Low Volume, High Density pen culture. fish culture systems. the globe to share knowledge A key to the success of the U.S. on sustainable aquaculture, U.S. Soy formally establishes a China aquaculture program with a full‐time 1993 program manager. soy feed development effort was technology for use in the the formulation, manufacture, field, as well as databases for Aquaculture program hires full‐time, China‐based technical director. 1996 and field demonstration of aquacultural use, all in the hope First extrusion feed mill in China begins production of extruded aquafeed. 1997 sustainable feeds for all life of furthering its credentials as a U.S. Soy hires China aquafeed specialist to assist with extruded feed 1998 stages of the major omnivorous trusted partner for soy-importing development and demonstration. freshwater fish species cultured countries and their aquaculture 1999 Initiation of marine fish culture feeding demonstrations. in China. This included vitamin industries. Soy in Aquaculture program broadens focus to South and Southeast Asia. 2000s and mineral pre-mixes formulated We sat down with Colby specifically for the various life Pinkstone, Senior Director of Multi‐year feeding demonstrations focus onFeeds water conservation and U.S.2000 Soy Industry Leadership in Soy‐Optimized Aqua and Production Technologies water recycling technologies. stages of these fish. Due to the Strategic Programs at USSEC, high cost and limited availability to get a better understanding Training shifts to specialized topics – fish hatchery management, disease 2003 management, fish breeding and genetics, sustainable marine production technologies, shrimp nutrition, and other technical topics. of fish meal, which had previously of its work with the aquaculture been the primary protein source industry, and the global impacts Ocean Cage Aquaculture Technology (OCAT) deploys to test soy‐optimized 2004 marine fish feeds. for fish feeds, it was essential of its actions on behalf of that new feeds be developed with U.S. soy. U.S. Soy transfers Global Soy in Aquaculture international aqua program to USSEC. 2006 renewable and sustainable plant First In-Pond Raceway System (IPRS) is constructed in China on a farm in 2013 proteins. Soybean meal proved [Feedinfo] USSEC’s engagement Jaingsu Province. U.S. Soy Sustainability Assurance Protocol (SSAP) is introduced. to be an ideal replacement with the international 2014 International Aqua Feed Formulation Database (IAFFD) is created with support from U.S. Soy. for fishmeal in freshwater fish aquaculture industry dates back Start of feed formulation workshops with commercial aquafeed formulators feeds. Today, soybean meal is decades. What were some of 2015 using the IAFFD and commercial feed formulation programs. the most used protein source in the initial hurdles faced by the 2016 IPRS demonstrations is introduced in Vietnam. aquafeeds globally. Soy in Aquaculture program? 2017

USSEC and WorldFish collaborate on IPRS in Egypt. Best Aquaculture Practices

(BAP) standards include SSAP as a soy source standard for feed mills. [Feedinfo] Your organization has [Colby Pinkstone] Among the said that U.S. soy is a “premier 2021 U.S. soy industry’s first aqua USSEC creates online IPRS User Manual. ingredient” for aquafeed in the programs would be U.S. Soy’s More than 13,000 raceways operating in 10 countries. 2023 sector. Can you expand on what technical seminars carried out makes U.S. soy scientifically in China in 1989. Initially, the optimal for producers around the world? hurdle was transitioning the Chinese aquaculture industry from a grass or waste fed aquaculture system to a pelleted feed system. To learn more about how U.S. Soy can enable your business, please contact your U.S. Soybean Export Council (USSEC) region or [Colby Pinkstone] From frogs to tuna there’s a place for U.S. soy This required a high-quality pelleted feed was formulated forhttps://ussec.org/contact/. countrywhich representative; or submit your contact details via as an excellent source of protein and unsaturated fats. Inclusion aquatic species, rather than terrestrial.

16 | AUTUMN 2023

About U.S. Soybean Export Council (USSEC): The U.S. Soybean Export Council (USSEC) focuses on differentiating, elevating preference, and attaining market access for the use of U.S. Soy for human consumption, aquaculture, and livestock feed in 80+ countries internationally. USSEC members represent the soy supply chain including U.S. Soy farmers, processors, commodity shippers, merchandisers, allied agribusinesses, and agricultural organizations. USSEC is funded by the U.S. soybean checkoff, USDA Foreign Agricultural Service (FAS) matching funds, and industry. Please visit www.ussec.org for the latest information, resources, and news about USSEC and U.S. Soy internationally.

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Sponsored | INDUSTRY PERSPECTIVES in aquaculture diets is ideal due to its protein content, balanced amino acid profile, and high levels of palatability and digestibility for most cultured fish and shrimp species. These attributes, coupled with verified sustainability, deliver optimal performance and profitability for producers responding to increasing consumer demand. USSEC has conducted extensive research and numerous feeding trials over the years to demonstrate the advantages of U.S. soy to the aquaculture industry. For access to these scientific studies, visit: Aquaculture: 20 Technical Bulletins to Dive Into - U.S. Soybean Export Council (ussec.org) [Feedinfo] Why is sustainability particularly important for aquaculture, and what can U.S. soy provide in that regard? [Colby Pinkstone] The FAO forecasts a 6% increase in aquatic food consumption by 2030 while consumers continue to demand more sustainable products. In response, the aquaculture industry is transforming to deliver more protein sustainably. U.S. soy has the lowest carbon footprint, including land use change, versus soy of other origins according to Blonk Consultants’ Agri-footprint. Furthermore, the U.S. Soy Sustainability Assurance Protocol (SSAP) verifies that soybeans and soy products produced in the United States are compliant with a system of sustainability and conservation laws and regulations. U.S. soy is also becoming an increasingly popular alternative feed ingredient to wild-caught fish helping to relieve overfishing of the world’s oceans. [Feedinfo] Can you explain in-pond raceway systems, or IPRS for short? What about IPRS technology produces such higher yields than traditional pond setups? [Colby Pinkstone] IPRS is an intensive pond aquaculture technology that uses “raceways”, or fish production cells within a pond. The system incorporates continuous water circulation simulating a more natural setting which effectively removes waste material and prevents discharge to the local environment. This technology is primarily implemented in freshwater fish aquaculture production but can be applied to marine fish aquaculture in salt or brackish water environments with a few modifications to materials and coatings to combat corrosion. This design minimizes the size of the operation while maximizing capacity. As a result, producers can realize double and even triple yields more sustainably while conserving natural resources, like water. USSEC first introduced IPRS to China in 2013. Adoption of this advanced system has expanded rapidly since then. Today, the IPRS system is present in 10 countries with 14,000+ units currently in operation. Species include various tilapia, carp and catfish, rainbow trout, largemouth bass, sea bream, and pangasius. [Feedinfo] Why is USSEC, an organization for soy exports, supporting this technology, and what does your support consist of? [Colby Pinkstone] Good USSEC is focused on developing relationships and becoming a trusted partner to international

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customers of U.S. soy through knowledge transfer, capacity building and maximizing return on investment. Our production expertise in many different aquaculture systems provides us with a unique opportunity to help transform the industry and grow food and nutrition security. USSEC also drives the Soy Excellence Centers (SECs), an initiative to educate and train early-to-mid career protein professionals and producers to enhance industry capability and capacity in four developing and emerging markets for soy. These regions include the Americas, Asia, Middle East and North Africa (MENA) and Sub-Saharan Africa. The intent here is to help create an enabling environment that allows such early-to-mid career protein professional across the soy value chain the access to world class resources and expertise. The SEC program has implemented aquaculture training in the Americas, Nigeria and MENA. South Asia’s and Southeast Asia’s SEC aquaculture programs are under development and will be implemented soon. The MENA region is the pioneer in starting SEC training for aquaculture beginning in September 2019. Since then it has trained about 12,882 participants across 57 trainings and counting. The Nigeria SEC, which adopts a “train the trainer” approach, taught 91 participants in 2022. The trained professionals reach out to more aquaculture professionals and train them in different localities within Nigeria. The Americas region started its aquaculture training in May 2023 and has so far trained over 600 participants. In total the SEC aquaculture program has reached out to 13,578 trainees as of August 2023. The SEC program has worked on introducing the “self-paced, hybrid model” for training participants through a virtual approach across the emerging market space, and this tactic is seen as an efficient tool in offering more trainings to a larger number of young professionals. Trainees have found the course to be very useful in improving their knowledge, which in turn is used to improve efficiencies in their day-to-day operations. [Feedinfo] Another project your organization is involved with is the International Aquaculture Feed Formulation Database (IAFFD). What is so valuable about the IAFFD database, and how does USSEC contribute to this? [Colby Pinkstone] Good feed formulation approaches start with good tools. USSEC identified the need for a high-quality aquaculture feed formulation database and, in cooperation with the United States Agency for International Development (USAID), helped fund the initial creation of the IAFFD in 2015. Since then, it has received further support by the international aquaculture industry (public, private, non-governmental and nonprofit organizations) to vastly improve and expand the database. Today the IAFFD is a commercial standard aquaculture feed formulation database for over 30 commercially important species, providing detailed information for over 700 feed ingredients. It is publicly available free of charge to industry professionals at www.IAFFD.com It is also a valuable resource for teaching formulators to work with soy versus fish products, thereby saving considerable feed costs in doing so. In this scenario, it is not uncommon to find savings of up to $50 USD per ton of feed by using the database. Published in association with USSEC

AUTUMN 2023 | 17

FEEDINFO SUMMIT

Animal producers overstretched by cost, labour, disease, regulation, and the sustainability conundrum “I’ve been in [the poultry industry] 40 years. The last two years, we’re running out of pivot.” That was how Jim Shepard, VP of Operations at Mountaire Farms, summed up the challenges facing his US poultry business in 2023. In other words, the difficulties had been piling up, from labour shortages to feed prices to inflation, and the resources to adapt to continuous pressure were running low. Shepard was speaking as part of a panel on navigating challenging markets as a livestock and aqua producer. Fellow panelist Kyle Coble, Director of Nutrition Services at JBS Live Pork, agreed that these had been particularly challenging years financially for his sector, thanks to an oversupply of pork on the market. “We’ve got the lowest returns for producers for 20 years,” he asserted. This can aggravate the already tricky task

of securing qualified labour. “It’s hard to keep up the morale of the team; you’ve got great results, but the product’s just not worth much.” For the Norwegian salmon industry, according to Christine Lyngsgård Larsen, Chief Procurement Officer of the Salmon Group, the biggest worry is a steep new 25% tax which was passed this year. Moreover, health issues, in the form of winter ulcers, are top of mind. Birthe Steenberg, Secretary-General of European poultry industry association AVEC, observed that the rising prices of inputs from feed to energy had put pressure on producers. In the EU, regulatory changes accompanying the Green Deal are another source of potential headaches. “We’re looking at a revision of the animal welfare legislation where we see things we don’t understand,” she said, pointing out that EFSA’s opinion on broilers

called for ridiculous diet formulations. Heleen Lansink-Marissen, owner of Dutch dairy farm De Melktapperij, elaborated on another aspect of green regulation. “We have a big nitrogen problem,” she explained, and noting that the industry was going to have to figure out how to meet requirements to cut nitrogen emissions by 50%. Moreover, her main takeaway — and a common refrain from many involved in the value chain who spoke at the Feedinfo Summit — was that something had to give, that something fundamental or structural needed to be rethought. Society as a whole is demanding more sustainable production, and the industry recognises that sustainability is necessary, but at the end of the day consumers aren’t willing to pay more. “We need a new vision of how to sell sustainability to society.” By Shannon Behary, senior editor

Freight challenges loom due to capacity surplus pace with the planned capacity increases, creating a potential crisis in the freight industry. Madsen explored three possible courses of action for carriers to manage this situation: LAYING UP CAPACITY: A strategy previously employed during the 2008-2009 financial crisis, when carriers suspended operations on certain vessels. BLANKING SAILINGS: Removing capacity to match demand, but this could lead to disruptions for shippers. UNDERUTILISING: Operating at lower utilisation levels, but this would be costly and could impact carrier profitability.

The most probable solution, according to Madsen, lies between options two and three. Carriers will likely need to sail underutilised to some extent while being prepared to absorb the associated costs. Madsen also discussed the impact on freight rates, noting that spot rates for 40-foot containers were declining. He urged shippers to demand better service levels from carriers, emphasising that schedule reliability comes at a cost, which shippers should be willing to pay. By Heather McGuire Doyle, senior analyst

Capacity in the global container shipping market continues to expand while demand decreases, revealing a critical challenge in the freight industry, according to Niels Madsen, Vice President of Product and Operations at Sea-Intelligence. Madsen explained that global demand has declined compared with 2019, with significant repercussions for crucial trade routes, including Trans-Pacific and AsiaEurope. Meanwhile, shipping capacity has continued to expand. Madsen revealed that carriers had scheduled massive capacity investments, indicating a potential oversupply issue. He cautioned that demand isn’t keeping

18 | AUTUMN 2023

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FEEDINFO SUMMIT

AI, CRISPR, & cell-based meat sparking innovation in animal nutrition

From improving performance to reducing greenhouse gas emissions to inventing brand-new ingredients for pet food formulation, novel solutions to big issues facing the animal nutrition industry were thick on the ground at the Feedinfo Summit’s innovation lab in Vienna. Here are a couple of the innovations that may soon be helping to improve the welfare and sustainability of animal diets:

• AI INSIGHTS CONNECTING INPUTS AND OUTPUTS OF ANIMAL PRODUCTION. As explained by Luis Romero, Founder & Managing Director of Biofractal, we know what’s going into the animal, in terms of nutrition and management, and the output, in terms of animal performance, but what is happening within the animal is something of a black box. “Our objective is to open the box,” he said. Biofractal has decided to focus on gene expression in the animal. The startup believes that with AI, gene expression data can provide valuable insights that animal producers can action – for example, that a limitation of branched chain amino acids is costing three points of FCR. There are, of course, a number of applications for such insight, even outside of live production management. Feed additive or animal health companies, for example, could use

it for new product development and testing, breeders could use it to inform genetic selection, and it could even provide in-depth data to meet suppliers’ requirements surrounding animal welfare. • APPLICATIONS OF CRISPR TECHNOLOGY TO REDUCE METHANE EMISSION. Ermias Kebreab, Associate Dean and Professor of Animal Science at the University of California, Davis, revealed to the Feedinfo Summit audience a research project which will run for seven years, based around microbial engineering of the gut population in cattle. More specifically, the aim is to identify the genes responsible for methanogenesis, knock them out using CRISPR, and inoculate the animals with the modified microbes. According to Kebreab, intervention early in the animal’s life seems to lead to a sustained change, although the edited genes can be used in either calves or adult animals. “It’s a high-risk, high-reward type of work,” he said. • CULTIVATED/CELL-BASED INGREDIENTS FOR PET FOOD. The meat consumption of pets gives them a strikingly large carbon footprint. However, it is extremely difficult to formulate pet diets without it, because it provides essential nutrients like taurine and carnitine, and acceptance of synthetic versions of these are low – cats, in particular, are picky eaters. Biocraft is working on a solution: cultivated meat, taken from cell samples of animals and grown in bioreactors into a biomass that can be used to provide these essential nutrients. According to company representative Theresa Rothenbücher, the company’s first product will be a cultured mouse-meat for cat treats. Before that, though, there is much to do: it would like to have a pilot plant starting up in 2025, and it must get its product approved in Europe. Long-term, it aims at products which are price competitive with traditional meat-based ingredients for pet food. By Shannon Behary, senior editor

Calysseo nearing commercialisation of fermentation-derived protein product Calysseo, a joint venture between animal nutrition giant Adisseo and single cell protein manufacturer Calysta, told delegates at the Feedinfo Summit 2023 that it is on the verge of commercialisation for the first volumes made at its industrial-scale FeedKind fermentation-derived protein facility in Chongqing, China, which started activities in late 2022. The facility will produce 20,000 tonnes annually. Initially, production will be available for use in China’s aquaculture

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market, most likely in 2024, said Herman Sloot, VP of Commercial Development at Calysta. Sloot also said that his company is finalising regulatory approval, which he expects this year, adding that FeedKind is already registered in the EU’s feed catalogue, while US GRAS for salmon and AAFCO approval applications are underway. By Simon Duke, editor-in-chief

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FEEDINFO SUMMIT

Feed additives in 2023: price, supply, and demand developments The first half of 2023 was marked by inflation, oversupply, and declining spot prices in feed additive markets. Nevertheless, starting in August, amino acid prices began to climb higher due to a tightening of global supply expected in Q4. For vitamins, cautious buying continues, and vitamin prices have not firmed like amino acids. While speaking at the 2023 Feedinfo Summit in Vienna, Heather McGuire Doyle, Senior Analyst at Feedinfo, described how supply, demand, and prices have evolved during the first half of the year, shifted in August, and what lies ahead for Q4 and into 2024. Supply and delivery timing and costs have improved following the disruptions caused by the COVID-19 pandemic and the consequent supply chain crisis. During that period, resellers and buyers stockpiled and adopted a ‘just-in-case’ approach. Since then, the landscape has evolved, and destocking has taken longer than anyone imagined, Doyle explained. “With resell and warehouse supply ample, buying trends have been tempered by caution, driven by concerns about inflation and demand. There is a distinct focus on minimising stockpiles of both raw materials and finished goods,” Doyle said. “This has not changed much through the year, especially in vitamin markets.” “While price increases have been observed in some areas, overall low profitability in the livestock sector – coupled with uncertainty surrounding crop prospects and harvest prices – is causing buyers to approach the market with hesitancy, and while we see an improvement in amino acid demand, caution still prevails in some feed additive markets, particularly vitamins,” she added. Doyle said the market was very quiet during the first half of the year but suddenly began to “wake up” in August.

THE MARKET WAS VERY QUIET DURING THE FIRST HALF OF THE YEAR, BUT SUDDENLY BEGAN TO WAKE UP IN AUGUST. HEATHER MCGUIRE DOYLE 22 | AUTUMN 2023

She attributed this to the peak demand season in China coming earlier and high soybean meal prices impacting amino acid demand. High soybean meal prices tend to cause buyers to consider using more amino acids in their feed formulas to compensate for the lost protein content. “The peak demand season in China, typically occurring in October/November, has seemingly started earlier this year and is expected to extend into November, as market players react to current conditions and prepare for upcoming festivals, including National Day, Mid-Autumn Festival, New Year’s Day, and Spring Festival,” Doyle said.

AMINO ACIDS Amino acid manufacturing is primarily concentrated in China, although there is some production in the Americas and Europe. CJ has notably expanded its capacity in the Americas, while Fufeng’s attempt to open a plant in North Dakota was met with opposition from activists in 2022. “The global methionine market is undergoing a dramatic transformation. The market, which faced inflation, oversupply, and declining spot prices earlier this year, is now experiencing a resurgence in demand and pricing,” Doyle said. Global methionine prices exhibit regional variations, with the highest prices found in the US due to factors such as the US-China trade war and anti-dumping investigations adding tariffs to the import prices. However, with shipping cost reductions and improved shipping times, Doyle said that methionine from China and Singapore especially has come into the US market since late 2022, exerting pressure on local spot prices. Earlier this year, global methionine prices experienced significant declines attributed to inflation concerns, cautious buying, and the anticipation of new production capacity. Bird flu and swine disease outbreaks further dampened demand in various markets. Recent developments have led to price increases in Europe and China, driven primarily by tight supply. Producers, buyers, and traders across the board have reported low stock levels, with supply constraints persisting. Regarding methionine production, global capacity is distributed across Europe, East Asia, North America, and Southeast Asia, with no single region holding a dominant position, Doyle explained. Traditional manufacturers, including Adisseo, Evonik, and Novus, have historically dominated. However, major Chinese feed additives producer NHU is set to open a new DL-methionine unit in H2 2023, further altering the landscape.

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FEEDINFO SUMMIT

THE GLOBAL METHIONINE MARKET IS UNDERGOING A DRAMATIC TRANSFORMATION. THE MARKET, WHICH FACED INFLATION, OVERSUPPLY, AND DECLINING SPOT PRICES EARLIER THIS YEAR, IS NOW EXPERIENCING A RESURGENCE IN DEMAND AND PRICING HEATHER MCGUIRE DOYLE VITAMINS

MINERALS

Vitamin A prices have fluctuated, with excess supply and low demand contributing to price declines in all regions during the first half of the year. “High energy costs and inflation have challenged European consumption, but a global recovery in consumption is expected to improve operating rates starting from 2023 onwards,” Doyle said. Vitamin E markets have faced slow demand, with warehouses remaining full and destocking taking longer than anticipated. Vitamin B2 experienced a challenging market situation in the year’s first half, marked by poor demand, declining volumes and prices, and challenging business conditions. “Low stocks ahead of summer maintenance contributed to price increases in June, especially in China,” Doyle said.

Copper sulphate spot prices have closely mirrored copper metal market trends, with European demand showing a 35% decrease from the feed sector. Caution prevails among buyers navigating inflation and demand concerns. “In the US, spot buyers seem to favour truck-by-truck purchasing, with some waiting until the last week of the month to purchase the following month’s supplies,” Doyle said. Feed phosphate prices experienced a significant slump in the year’s first half, particularly in Brazil. “Supply concerns initially emerged with the Russia-Ukraine war but were alleviated in 2023 as Russian material continued to flow, Chinese exports became available to the rest of the world, and global demand remained weak,” Doyle said. “However, production issues at Lifosa in Lithuania have persisted for months, and the facility is now in the mothball process.”

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AUTUMN 2023 | 23 18.09.23 11:59

FEEDINFO SUMMIT

Information, cooperation and diversification key to tackle supply chain hurdles

In a Feedinfo Summit panel called “De-risking the supply chain and driving change in the new equilibrium”, participants discussed the biggest challenges affecting the global animal nutrition sector and outlined solutions that could help the industry adapt to an uncertain future. Christine Lyngsgård Larsen, Chief Procurement Officer from SALMON GROUP, a network of small and medium-sized salmon breeders in Norway, acknowledged that currency fluctuations, shortages, and soaring costs of raw materials used in animal feed have been key challenges for the companies in the past year. Tom D’Alfonso, Director of the Animal and Aquaculture Division at the US Soybean Export Council (USSEC), stressed that the issue of sustainability still plays an important role in driving change.

Ernest Tan, Head of Consumer Goods at Wholesale Banking UOB, noted that confidence among investors for long-distance shipping has diminished, so companies in South Asia have been exploring local ingredients, downstream integration, and building extra storage capacity to be able to move stock around. He predicted more financial and investment volatility in the next 12 months. Meanwhile, Cornel Boere, the Global Procurement Director for Raw Materials and Ingredients at Agrifirm, agreed that factors crucial for greater financial resilience include the ability to rely on supply of raw materials and less dependency on external suppliers. In answer to a question about how to offset higher costs in animal nutrition, the panellists identified the need for more communication between suppliers and customers, ensuring they understand each other’s needs, and discuss quality as well as prices. Digitalisation, data collection, forecasting, and having contingency plans in place to deal with any potential disruptions to raw materials supplies were also suggested as promising strategies implemented in the past couple of years, the panellists noted. “You need to have one foot in the short term, and other foot in the long term,” the panel concluded. By Karolina Zagrodna, senior analyst

Extreme weather and geopolitical tensions drive global rapeseed and soybean markets

within the Russian-occupied territories. Subsequently, prices The global rapeseed and soybean markets have been experienced a sharp drop due to over-purchasing. experiencing significant turbulence in recent years, primarily Despite tensions with some of its immediate EU neighbours attributed to extreme weather conditions, disruption in seeking to slow the flow of Ukrainian agricultural European trade, and China’s surging demand. During products into their markets, imports of rapeseed the Feedinfo Summit 2023 in Vienna, Marcel from Ukraine to the EU continued to rise during Goldenberg, Mintec’s Chief Market Reporting the 2022/23 period. The EU’s good harvest Officer, provided valuable insights into the in 2022/23 led to stable-to-weak trends in dynamics of the oilseed markets. rapeseed prices within the region. Key rapeseed-producing nations/regions, Goldenberg also shed light on the soybean including Australia, Canada, China, the EU, and market, highlighting notable developments. India, have been grappling with a complex set of In 2023/24, Brazil achieved its largest-ever challenges. According to Mintec supply data, the soybean crop, while Argentina’s soybean EU is expected to witness an increase in rapeseed RC EL production surged by an impressive 97%. In production during the harvest year of 2023/24. GO LDENBERG contrast, the US faced a decline in soybean harvests Ukraine plays a crucial role in rapeseed production due to extreme weather conditions. within the European continent. The onset of the Goldenberg expressed a bearish sentiment in the soybean Russia-Ukraine conflict in 2022 led to a surge in rapeseed prices market but noted that soybean meal was experiencing relatively from March to May of that year. This price spike was driven by bullish tendencies due to heightened demand from China. fears surrounding supply disruptions. Fortunately, rapeseed By Lydia Ma, senior analyst production in Ukraine remained unaffected as it is not grown

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AUTUMN 2023 | 25

BREAKOUT SESSION | FEEDINFO SUMMIT

Adisseo’s CEO sees Chinese feed leaving chaotic period behind As the world’s biggest meat and feed market, China is a critical area to understand. Thus, when Adisseo CEO Dr. Hao Zhigang presented on trends impacting the Chinese animal nutrition market at the Feedinfo Summit 2023 in Vienna, it was to an engaged audience eager to learn more about Chinese economic development, meat consumption, and government policy. According to Dr. Hao, the Chinese feed industry is ready to leave behind the “chaotic period” it has been in since 2018, when diseases including African Swine Fever (ASF) and COVID-19 brought great change to the industry. Even with the volatility these diseases caused, the period was characterised by “more and more capacity, strong competition, and lower price to market,” for the feed industry, he said. Chinese feed production demonstrated an astonishing compound annual growth rate (CAGR) of 5.8% over the period (although it should be noted that 2018 was an unusually low year because of ASF outbreaks, while 2022 saw swine production reach a new peak). This fiercely competitive environment has resulted in consolidation. By 2022, there were 36 feed mills producing over 1 million tonnes/year and almost 950 feed mills producing over 100,000 tonnes/year. Going forward, he anticipates a much more sober CAGR of 1.3% for feed production from 2023-2027. Even while small and medium-sized enterprises will continue to decline and large

enterprises continue to expand, the grand wave of consolidation has “almost completed”, in Adisseo’s view. In terms of different species, he sees a particularly strong future for aqua and poultry, as Chinese people increasingly turn to healthier proteins. For aqua feed, Dr. Hao predicts a 3% CAGR, and notes that the scale and concentration of the aqua sector is low, meaning there is still much room for further development. In broiler feed production, he anticipates a 1.5% CAGR, with the very large producers dominating and fewer farmers in the market. Swine is expected to be stable, while dairy will face some headwinds, including the macroeconomic situation driving down milk consumption in China, and a number of new actors entering the dairy space in the last five years, pressuring profitability. When it comes to government policy, two themes in particular came to the forefront: the push for sustainability and the desire to increase domestic food production to keep the country’s enormous population fed. Promoting low-protein feeds in order to reduce the country’s reliance on imported soybeans would contribute to both goals (and, Dr. Hao noted, the use of amino acids is going to be critical in formulating those diets). So, too, would the development of alternative proteins, including those from local raw materials such as peas, cotton meal, or rapeseed; Dr. Hao explained that there are now subsidies to encourage the development of various functional proteins. By Shannon Behary, senior editor

By 2022, there were 36 feed mills producing over 1 million tonnes/year and almost 950 feed mills producing over 100,000 tonnes/year.

26 | AUTUMN 2023

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BREAKOUT SESSION | FEEDINFO SUMMIT

Amid growing EU regulatory burden, feed industry should be watching out for “horizontal” directives too As seen in a breakout session of the Feedinfo Summit, the EU animal nutrition industry is facing growing regulatory requirements, particularly motivated by sustainability. Of course, some of these, like new animal welfare regulation, are very much on the radar of actors in this value chain. However, according to Eduardo Mulas, a partner at EPPA, many changes which could end up affecting animal nutrition are not, on the face of it, about animal production at all. Mulas gave examples from chemical industry regulation, such as the reviews of REACH and CLP (classification, labelleing, and packaging) which, he said, basically assess from a hazard perspective every single active chemical of products it pertains to. “Currently, this is a framework — feed additive regulation — that is not covered by the CLP regulations. One of the question marks is, in the future, will this [continue to] be the case or not?” Similarly, he said the water framework regulation might look like a distant concern, but is increasingly relevant to more and more sectors, requiring monitoring, data reporting, and even restrictions down the road. “It’s classically been applied to pesticides, to medicines, to animal medicines,” he noted, “but we see more and more extension of what is currently being reviewed, and that’s another one that might bring requirements which tend to be outside the scope [of what the animal nutrition industry is facing] now.” Indeed, there are other “horizontal” (or cross-sectorial) sustainability directives not specific to a single industry but which will require significant adaptation throughout the value chain. One is the so-called Taxonomy regulation: “the regulation that sets what can be considered ‘environmentally sustainable’ and which has become — and here we simplify a lot — the gate to green investments.” Again, Mulas emphasized that while its application in the animal nutrition industry is not imminent, the trend is to expand it to ever wider sectors of EU economic activity. “It’s very political, because it’s going to have a massive impact down the road, for investments, even private investments, and [investment]

criteria.” Additionally, the Green Directive regulation will provide breakdowns of permissible claims regarding the sustainability in product areas not otherwise covered by such regulation. Finally, there are regulations — a bit further off, but ultimately applicable to all corporate actors in the EU — such as the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive. “This will become absolutely mandatory for everyone.” Joining him, Dr. Miroslava Piskoríková, Managing Director of Pen & Tec (part of the Argenta Group), spoke of some of the innovative new products seeking to obtain EU authorisation, including everything from methane mitigants to novel solutions to bacterial threats (like bacteriophages against Salmonella), and even probiotics which seek to improve animal welfare by reducing the ammonia content in pig stool. “There are all kinds of products trying to make these kinds of claims,” she observed. “At the moment it’s not very easy to navigate, because there’s not specific guidance for the efficacy.” This is particularly acute for novel products such as phages. However, new EFSA guidance expected next year is expected to address this absence. She also discussed the impact of the 2021 transparency regulations on feed additive authorisations. According to her, it is not just that the administrative side of this process became more complex; instead, it also had an impact on the kind of study that could be used to support the dossiers. “We had to redesign the efficacy study, just to give you one example. For instance, in the probiotics studies in the past, we could introduce a small, mild stress to simulate the commercial conditions… now it’s getting rejected completely. So all the studies that were submitted and done have to be redone with the new study designs because of the new outlook on the science.” Circling back to the new EFSA guidance expected next year, she warned: “Just be aware that whatever is EFSA compliant now might not be valid after June 2024 when new set of guidance documents is adopted.”

JUST BE AWARE THAT WHATEVER IS EFSA COMPLIANT NOW MIGHT NOT BE VALID AFTER JUNE 2024

DR. MIROSLAVA PISKORÍKOVÁ

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PANEL DISCUSSION

Alternative proteins could change the world, but need feed industry partners to commit the environment is coming from”. Its process is also much less water-intensive than traditional protein production. Moreover, he adds that there are advantages for the users of these proteins as well, going beyond their inarguably better sustainability profile. For one, they can help users mitigate the risk of reliance on commodities which undergo volatile price swings. Hartz recounts one aquafeed producer who has been following Unibio’s development for years, eagerly anticipating the arrival of this alternative. “I need something else to mitigate my risk. I have to enlarge my basket of ingredients, because the day I’m hit by a fishmeal shortage, I’m going to die from that,” he paraphrased. For Kurmaly, too, providing the industry with a greater number of options is essential. “[Alternative proteins] aren’t going to replace plant proteins,” he asserted. Rather than thinking about either/or solutions, meeting the world’s rapidly growing protein requirements will require ‘and/and’ sort of thinking — or in other words, it’ll take all the solutions we’ve got.

SCALING UP Of course, before the world can profit from the many advantages of single cell protein, it must be scaled up, considerably. The prospect is simply uninteresting to feed formulators until commercially relevant volumes are available.

Growing populations and rising income levels are going to create a massive protein gap. As observed by Karim Kurmaly, director of smart protein at dsm-firmenich, we are heading towards a world with 2 billion additional people, and per capita protein consumption could increase by as much as 30%. For Kurmaly and fellow panelist Olivier Hartz, part of the executive team at Unibio, an important part to meeting this protein gap will be diversifying beyond ingredients like soybean meal and fishmeal which have traditionally been mainstays of feed formulation. Both are working on single-cell proteins – ingredients made not from vegetable or animal material, but from bacteria. Or, as Kurmaly puts it, “we’ve got the microbes to do the hard work of producing protein.” Such proteins have important advantages in terms of sustainability, as they can be massively scaled up without putting pressure on natural ecosystems. “[At dsm-firmenich] we’re simply using renewable energy, microbial strains, and biotechnology to produce a product called smart protein, which is non-GMO and decoupled from arable land or fisheries.” The company’s protytype, he claims, has a carbon footprint of 0.5 kg of carbon per kg of protein, and dsm-firmenich is aiming at bringing it down to net zero. Hartz fully agrees that “decoupling the protein production from arable land is key, because this is where most of the cost to

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FEEDINFO SUMMIT As Hartz explains, though, the main obstacle to scaling up is not technical — the microbe his company is using has actually been studied and touted as a potential protein source for decades, and Unibio’s tech has already been operating at a commercial scale plant in Russia for a few years now. Instead, it’s the capital required to build factories which can produce those massive volumes which is holding things up. He is insistent that the support of potential customers will be absolutely essential to helping the emerging single cell protein sector get that vital financing. “We need to have commitment from the industry in terms of offtake. Here’s my call to you: if you want us to scale up as rapidly as possible, please come closer to us. Engage in discussion. Let’s have pre-commitments on future quantities. “This will be conditional, of course. You won’t take all the risks, but this can be a shared risk with a future supply.” Kurmaly concurs. Pointing out that some alternative proteins do exist in the market today, whether insect-based or single-cell proteins or another technology, he notes, “if I’m a feed mill customer, and you’re not producing 100,000 tonnes, I’m going to be a bit careful [about making you my primary source of protein],” he explained. “It’s a bit of a chicken and egg situation; someone has to make the first move.” Drawing parallels to the establishment of credible alternatives to fish oil for the feed and supplements industry, he says, “we need to see elements of collaboration, strategic partnerships, which we have seen in the algal oil industry over the last five years, where collaboration was key. And with that, if you have commitment in offtake agreements, investors will provide the capex to scale up.”

Hertz also adds that there needs to be franker discussions about exactly how much a decrease in the carbon footprint of animal feed is worth in monetary terms. “Some companies are taking corporate commitments to drive their carbon footprint down. But …currently, you haven’t yet expressed to us the cost of the CO2… If a salmon feed producer in Norway wants a feed with below 2 kilos CO2, I want to know that constraint in the formulation, how much it’s worth. Because then I can figure out which technology to implement, and if it’s worth going up… we will make it happen, but please, share the numbers, the constraints, so that we can make our return-on-investment calculation.” While both companies are working with microbes that are, as Hartz puts it, “known to the regulators,” both agree that the years it takes to gain approval by bodies such as the US FDA or EFSA are important challenges for the sector as a whole. Harkening back to his previous role as head of Veramaris, Kurmaly says: “When I first started in novel ingredients, we sunk $200 million into steel and concrete in a place in Nebraska, to produce natural green algal oil. And I can tell you, my phones did not ring. Nobody rang me up and said ‘I want your oil.’ The adoption of novel ingredients is a hard slog. You’ve got to understand you’re [competing with] soy protein concentrate, with fishmeal, [ingredients] which have established supply chains… “The key success factor was collaboration: collaborating with courageous leaders who could see that in five or ten years, they would have to derisk their supply chains… I anticipate on the proteins will be the same… my experience is, it was not rosy, but it’s doable. But it takes a lot of hard work.” By Shannon Behary, senior editor

Experts explain LATAM’s potential and pitfalls Gustavo Penz, Managing Partner at NHU & CHR Olesen Latin America, and Juan M. Hernandez Vieyra, Commercial Director at FeedProfessionals, took stage at the Feedinfo Summit to shed light on the Latin American feed market. As Penz explained, even as meat production contracts in Europe and ASF has hampered Asia, Latin America has enjoyed growth, and future prospects look rosy. “The production of meat will continue to grow. A more than 10% growth rate in the next ten years is expected. So, demand for feed will continue to grow. And that’s basically valid for every country in Latin America, in every species.” Addressing critical challenges, Penz pointed to logistics issues, adding that it takes at least ten days for product to be unloaded at the port in Brazil. “Logistics is an issue, [especially] long transit times. It’s not that different from Europe, but seeing it from a broader perspective is different because we have issues at the ports. We have issues everywhere. Limitations to move material within the region.” Penz also highlighted economic issues and political instability as challenges not to be underestimated. “We have political instability. Maybe that’s a little bit everywhere nowadays, but I can tell you Latin America is a little bit more extreme. You [move products] from Venezuela to any other country; it makes life more complicated.”

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“I do believe that Latin America remains a very interesting region. I believe that Latin America is probably the agricultural superpower of the future,” Penz added. Shifting the conversation, Juan M. Hernandez Vieyra delved into the specifics of phosphates in Latin America. “Of course, Brazil is the biggest market, even as big as Europe, in terms of phosphate consumption,” he said. Vieyra also highlighted the potential for growth in technology. “Brazil, which is the biggest market and the one that has more intense technology, uses only 0.02% of the diets with this kind of technology. To give you an idea of the adoption of technology and the space this market has for the future, it’s huge.” Vieyra emphasised the importance of understanding local regulations for anyone who wants to do business in Brazil. “One of the main things that I believe when people are looking at Latin America is that you need to have a deep understanding of each market. You need to understand these differences.” “Differences have been found in regulatory situations; it is critical to understand when entering the market. In the past, Brazil was really a nightmare. Today, it is simplified with an online system and easy to get ingredients quickly,” Vieyra said. By Heather McGuire Doyle, senior analyst

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