Big food animal protein buyers talk consumer trends

Like their customers, animal protein buyers for General Mills Inc. and ARCOP Inc. are keeping an eye on the latest global consumer food trends.
In a presentation at the October 2015 Oilseed & Grain Trade Summit in Minneapolis, Drew Lein, markets manager for global dairy sourcing at General Mills, and Rohil Shah, a senior buyer at the Arby’s supply chain cooperative, discussed how changing consumer preferences for sustainable farming practices and pressure created by the 2015 outbreak of highly pathogenic avian influenza are influencing the way they do business.
Minneapolis-based General Mills is one of the largest food manufacturers and marketers in the world, with $17.6 billion in net sales in the company’s fiscal 2015 and $8.6 billion in net sales through the first two quarters of fiscal 2016. ARCOP, an Atlanta-based nonprofit supply chain co-operative for Arby’s Restaurant Group Inc., spends about $1.3 billion annually keeping the fast-food chain’s more than 3,400 stores in the continental U.S. supplied.

Sustainability

Around the world, consumers are becoming more concerned with where their food is coming from, Lein said.
“Consumers want to know more about their food. There’s a perception that, at companies, it is bad. We get a bad rap for that,” Lein said. “Consumers want their food to be more sustainable.”
In response to the demand, Lein said General Mills is pushing to have its top 10 ingredients – corn, cocoa, wheat, dairy, sugar beets, oats, sugarcane, vanilla, palm oil and fiber packaging – sustainably sourced by 2020. Specifically, the company is aiming to have liquid milk to demonstrate continuous improvement in terms of greenhouse gas emissions, water and energy usage.
A slide from Lein’s presentation said 20 percent of the liquid milk General Mills purchased in its fiscal 2014 was sustainably sourced.
Shah said ARCOP’s leadership shares General Mills’ concerns about sustainability, and its leadership is involved in the U.S. Roundtable for Sustainable Beef, a recently formed industry group focused on improving beef sustainability.

Organic, antibiotic, hormone and GMO free

Scrutiny on sustainable practices is also raising questions about the introduction of antibiotics, hormones and genetically modified organisms (GMOs) in animal feeds and how that affects the composition of the food that finds its way to the table. In reaction, consumers are turning to organic products.
When asked which of these four issues are most persistent among U.S. consumers, Lein said demand for organic is pervasive, but it’s a small segment of consumers who are pushing for organic products.
Shah said addressing antibiotic use in animal feed is a high priority. In September, Arby’s, along with a host of other fast-food chains, was issued a failing grade in a report on antibiotic policies authored by environmental groups like the Natural Resources Defense Council. The U.S. Department of Agriculture is also taking steps to eliminate antibiotics in animal feed.
The use of GMOs is harder to stop. Shah said GMOs are already present in animal feed, and his organization cannot drive its use through its current supply chain.
Additionally, Shah said changing the supply chain to match up with these trends creates concern about whether there is enough product to go around.
“If we were to go antibiotic free on chicken or on poultry, is that a sustainable supply? If there was a hiccup, what do we do? Do we go back to something that’s not sustainable?” Shah said. “We can’t really go back on our core consumers as well.”
Shah said he sees organic as something the company will need to consider in the future. Lein said the growing demand in the organic segment is putting pressure on the company to vertically integrate its supply chain to increase the availability of organic options.

Market volatility

As usual, the volatile pricing of protein commodities is a concern for ARCOP, Shah said. He said the 2015 outbreak of avian influenza obviously affected his company as it influenced the availability and pricing of turkey and eggs. Arby’s, he said, had to react quickly to find new suppliers and change its product formulas to ensure the company could still serve turkey and egg products at its restaurants.
“Market volatility is always going to be a factor. If it wasn’t, I am sure us commodity guys would be out of a job,” Shah said. “So, the reality is price volatility is always going to be an integral part in our lives and what we do.”
The past few years, he said, have been dubbed a “perfect storm” of factors, where poultry, pork and beef all saw strong year-to-year pricing gains while the supply was limited. The steadily increasing prices, coupled with the shortages caused by avian influenza, have pushed ARCOP to continue on its mission to find new markets and look for new suppliers who can provide a product, and a consistent price, as consistently as possible.

Novus International at the World Conference on Animal Production

The World Conference on Animal Production (WCAP), organized by the World Association of Animal Production, is held once every five years, so it is with great anticipation that the 11^th WCAP kicks off in Beijing, Chin,a on October 15. Novus is honored to once again participate in this important event dubbed the "Olympics" of animal science by the industry.
In addition to Diamond sponsorship of the six-day conference, Novus is hosting an informative half-day seminar entitled, "Gut Health: Creating New Value for Food Safety."
"Good gut health builds a strong foundation for animal performance and food safety," notes Dr. Chris Knight, senior vice president, research and development for Novus. "When infections occur in the intestinal tract, the intestinal barrier against pathogens and the nutrient absorption process is greatly impaired. Animal performance and producer's profitability are reduced, while consumers are left worrying about the resulting product quality. Novus's health and nutritional solutions are designed to help producers manage animal gut health and add new value to food safety."
Novus's Gut Health seminar will be held on October 18 from 8:30 a.m. until noon at No. 2 Convention Hall and will feature key industry experts from Novus and leading international universities discussing the importance and relevance of animal gut health and its impact on food safety. A complete agenda is online.
Also, Novus has organized two speakers at the plenary session on October 19. The first, "Is the rising demand for animal protein fueling climate change?," will be led by Dr. Frank Mitloehner of the University of California, Davis, and the second, "Structural integrity challenges in production animals," will be led by Dr. Mercedes Vazquez-Anon, Director, Nutrition Research for Novus.
For more than 20 years, Novus has been developing science-based nutritional solutions and services to support producers in achieving high animal performance with sustainable profitability.

Increasing nutrition absorption will meet rising food demands

Raising the efficiency of nutrition absorption in farm animals will be the next step in increasing farm productivity. This was the conclusion from the high-level biennial science gathering, InnoVision, organized by Nutreco research and development on June 18. Current research reveals that the potential exists to double the efficiency of metabolizing nutrients after absorption through the gut wall in farm animals. Achieving that potential would help meet the increasing demand for animal protein, and do so without increasing the use of limited feed raw material resources.
On average, the productivity of farm animals is 30-40 percent below their genetic potential. Innovations in animal nutrition are targeted towards optimizing performance on farm to narrow that gap. The InnoVision scientists concluded that, "Innovations in 'post-absorptive efficiency' can help close the gap between genetic potential of animals and their performance on farm, thereby contributing to sustainably increasing animal protein production: producing more from less."
At InnoVision, Nutreco scientists met animal science researchers from New Zealand, the United States, France and the Netherlands. During the meeting, Nutreco research and development professionals gained insight on the opportunities to improve "post-absorptive nutrient efficiency."
Professor Den Hartog, director of research and development and quality affairs at Nutreco said, "At our previous InnoVision meeting in 2011, we concluded that nutrition targeting animal health would boost productivity and sustainability. Since then we have seen great research results leading to successful concepts and products in the positive influence of functional ingredients on the health status of the animal gut and the role of its microbial population in animal performance. This year at InnoVision we identified a similarly promising research area. There are still many unknowns in the key factors and mechanisms that drive post-absorptive efficiency. We now have clear focus points for our research to go forward, such as functional ingredients to modulate and support metabolism and to balance the nutrient cost of events such as immune responses."
During his speech at the multi-stakeholder AgriVision conference that follows InnoVision, Professor Leo den Hartog, spoke about Nutreco's focus areas in animal nutrition. In addition to feed efficiency, key focus areas are young animal nutrition, preventive gut health and precision feeding. 

Alltech discusses modern animal production at seminar

From left: Pictured at Alltech’s Poultry Solutions Seminar, ‘Modern Animal Production – Turning Challenges into Opportunities,’ is Jon Ratcliff, F.A.C.S. Ltd. UK; Patrick Charlton, Alltech Regional director for Europe; and Patrick Wall, University College Dublin, Ireland.

Alltech held a poultry solutions seminar on "Modern Animal Production — Turning Challenges into Opportunities" in Meath, Ireland.
A six-person panel comprised of industry experts presented their views and answered questions on current issues. Topics included the global outlook for poultry production, changes in agriculture, legislation and the future of the European poultry industry. "Alltech's annual solution seminar series provides a unique forum for leading nutritionists, veterinarians and other industry experts to develop and share ideas on the future of our industry," said Alltech Europe Vice President Marc Larousse.
Delegates and speakers also participated in an electronic survey that asked questions regarding their opinions on the current state and future of the industry. Results revealed that 52% of respondents are concerned about the contamination of inorganic materials and 47% think chicken is the greenest meat (followed by fish, beef and pork). A large majority of attendees (72%) believe that research and development in the poultry industry is "vital for progress in the current market."

CAST offers free seminar on sustainability

A free symposium has been arranged for June 8 to 10 in Washington, D.C. to review aspects of bioethics, economics and social issues in relation to animal production. The program, Sustaining Animal Agriculture: Balancing Bioethical, Economic and Social Issues, is organized by the Council for Agriculture Science and Technology (CAST) and the USDA.
Speakers include a cross-section of specialists representing academia, consultants, FMI members and agribusiness multinationals. The meeting takes place in the Jefferson Auditorium of the South Agriculture Building of the USDA.

Intensive agriculture in the cross hairs

A number of recent reports on government initiatives and press releases by activists opposed to intensive animal production are individually irritating but taken as a whole appear threatening. Some of the issues which have emerged since the advent of the new administration are clearly aimed at the most productive components of agriculture and appear to favor some idyllic pre-depression, family-farm mindset.
The new administrator of the Grain Inspection, Packers and Stockyards Administration has indicated his intention to clarify the relevant sections of the Packers and Stockyard Act dealing with the principles of unfair, unjustly discriminatory and undue unreasonable preference or advantage to any person or geographic locality. This approach may relate to the current concerns of consolidation in the red meat industry and the traditional practices which are followed. It could also apply to the relationship between integrators and contractors producing broilers following industry cutbacks resulting in the inevitable retrenchment of growers.
An organization termed the Campaign for Family Farms and the Environment has demanded suspension of Farm Service Agency direct and guaranteed loans for hog and poultry facilities. These loans are in fact intended to make it possible for individual families to participate in the efficient production of hogs and poultry.
Restricting loans for new and more efficient housing will prevent entry of farmers into the production chain. Output will be limited and job opportunities in processing plants, feed mills and the allied industries will be lost. Consumers will inevitably pay more for their products and our competitive export situation will be sacrificed.
Who are the family farm organizations such as Iowa Citizens for Community Improvement, Missouri Rural Crisis Center and the Land Stewardship Project of Minnesota? ... Read the full blog.