Analysis on the situation of feed industry in Shandong Province in the first half of 2021
2021 is the first year of the "Fourteenth Five Year Plan". The General Office of the provincial government issued the Implementation Plan of Shandong Province for Building a Qilu Model of National Modern Animal Husbandry (hereinafter referred to as Programme). It is clearly proposed to build a safe and efficient feed veterinary drug system with outstanding advantages; Establish provincial feed grain reserves and promote the reduction and replacement of corn and soybean meal; Standardize the production and use of feed veterinary drugs, and achieve "zero growth" in the use of veterinary antibacterial drugs; By 2025, the output value of the top 20 feed and veterinary drug enterprises will account for more than 70% of the total output value of the province. The introduction of the Plan will not only accelerate the high-quality development of animal husbandry, but also promote the feed industry to become better and stronger.
In the first half of 2021, the feed industry of Shandong Province will strive to overcome the difficulties caused by the rising price of raw materials, the declining profitability of the breeding industry, and the lower than expected livestock and poultry production, actively adjust the formula structure, reduce costs and increase efficiency, and continue to maintain a high growth rate on the basis of a large base of total feed; Deeply implement the quantitative and hierarchical management of feed production enterprises, increase the supervision and spot check of "double random and one open" and flight inspection, and ensure the high-quality development of animal husbandry.
1、 The output value and output of feed have maintained rapid growth
In 2021, the price of feed raw materials will rise significantly, the recovery momentum of pig production capacity will exceed expectations, the profitability of the breeding industry will decline significantly, and there will be periodic losses. The feed industry in Shandong Province will strive to overcome market fluctuations, and the output value of feed will maintain rapid growth. According to the China Feed Industry Statistics Information System, as of the end of June 2021, there are 2035 registered feed production enterprises in Shandong Province; The gross output value of feed industry in the first half of 2021 will be 86.22 billion yuan, with a year-on-year growth of 28.6%; The output value of feed products (formulated feed, concentrated feed, additive premix feed) was 75.38 billion yuan, up 29.2% year on year; The output value of feed additive products (directly prepared feed additives and mixed feed additives) was 10.84 billion yuan, up 24.8% year on year. In the first half of 2021, the total output of feed products (including pet feed) in Shandong Province will be 22.414 million tons, with a year-on-year growth of 14.8%. Among them, the output of formulated feed was 20.602 million tons, up 12.4% year on year; The output of concentrated feed was 1.271 million tons, with a year-on-year growth of 80.0%; The output of additive premix was 427000 tons, up 0.8 year on year; The total output of pet feed was 114000 tons, up 70.2% year on year. In the first half of 2021, the output of feed additive products will be 1.55 million tons, with a year-on-year growth of 19.4%. Among them, the output of directly prepared feed additives was 1.443 million tons, a year-on-year increase of 19.3%; The output of mixed feed additives was 107000 tons, up 20.1% year on year.
（1） Accelerated growth in Yantai and Liaocheng According to China's feed industry statistics information system, in the first half of 2021, the feed output of Linyi City will be 4.72 million tons, up 8.9% year on year, and that of Weifang City will be 4.435 million tons, up 17.3% year on year; The feed output of the two cities accounted for 21.2% and 19.9% of the whole province respectively. The feed output of Yantai City and Liaocheng City increased by 17.8% and 16.7% year on year respectively. The feed output of Dongying City and Zibo City increased by more than 20% year on year.
（2） Swine production capacity recovered rapidly and feed output increased greatly
According to the statistical information system of China's feed industry, the pig feed output of Shandong Province in the first half of 2021 will be 6.363 million tons, with a year-on-year growth of 57.0%. Among them, the output of formulated feed was 5.541 million tons, a year-on-year increase of 58.7%; The output of concentrated feed was 711000 tons, a year-on-year increase of 51.2; The output of additive premix was 111000 tons, up 19.9% year on year.
Linyi City and Weifang City are the main areas of pig breeding in Shandong Province, with a large base of pig feed output. With the recovery of pig production capacity, the growth rate of pig feed output in the first half of 2021 will decline slightly, with a year-on-year growth of 23.7% and 38.3% respectively; In the first half of the year, the pig feed output of Liaocheng, Rizhao, Yantai and Qingdao increased by more than 40% year on year.
The pig production capacity in Shandong Province recovered rapidly. According to the data of Shandong Provincial Bureau of Statistics, at the end of March, the pig population in Shandong Province was 28.221 million, up 29.4% year on year; The pig sales increased by 13.1%, 42.1 percentage points higher than the same period last year. Large scale breeding groups and self breeding scale farms expanded rapidly. At the same time, due to the comprehensive impact of secondary fattening and still large slaughter weight in the first half of the year, pig feed consumption increased significantly. In the first half of the year, the feed output of sows, piglets and growing finishing pigs increased by 53.6%, 28.2% and 66.9% respectively. However, since April, the growth rate of pig feed output has slowed down due to the decline of breeding benefits, and the output has decreased continuously month on month in May and June.
The concentration of pig feed production continued to increase. In the first half of 2021, there will be about 453 enterprises/groups producing pig feed in Shandong Province, 14 less than the end of 2020. There are 24 enterprises/groups with pig feed output of more than 100,000 tons, whose pig feed output accounts for 66.0% of the province, up 3 percentage points over the same period of last year.
（3） The output of feed for laying poultry was basically stable, the feed for laying hens increased, and the feed for laying ducks decreased
According to the statistical information system of China's feed industry, the output of egg and poultry feed in Shandong Province in the first half of 2021 will be 1.836 million tons, up 0.4% year on year. Among them, the output of formulated feed was 1.47 million tons, down 6.2% year on year; The output of concentrated feed was 147,000 tons, with a year-on-year growth of 768.2%; The output of additive premix was 218000 tons, down 10.1% year on year. The egg and poultry breeding in Shandong Province is relatively decentralized, and the output of egg and poultry feed in Weifang City takes the lead in the province, accounting for 28.4% of the province. In the first half of 2021, the output of egg and poultry feed will increase by 32.3% year on year; The output of egg and poultry feed in Dezhou, Heze and Yantai decreased by 27.0%, 19.2% and 11.0% year on year respectively.
The feed for laying hens fluctuated at a high level, while that for laying ducks narrowed. According to the statistical information system of China's feed industry, Shandong Province's feed output for laying hens in the first half of 2021 will be 1.118 million tons, up 8.7% year on year; The feed output of laying ducks reached 511000 tons, a year-on-year decrease of 27.7%, including a year-on-year decrease of 38.7% in the first quarter and 12.6% in the second quarter.
The competition pattern of egg and poultry feed has changed greatly. In the first half of 2021, there will be 17 enterprises/groups with an egg and poultry feed output of more than 20000 tons, and the total amount of egg and poultry feed produced will account for 64.4% of the province's egg and poultry feed output; Although the total scale of the egg and poultry feed market was stable in the first half of the year, the output of nearly 60% of egg and poultry feed production enterprises decreased year on year due to the downturn of breeding market and the change of breeding customer groups.
（4） The feed for meat and poultry fluctuated at a high level, while that for broilers increased and that for ducks decreased
Shandong Province is one of the largest meat and poultry breeding and export provinces in China, and its production capacity has continued to expand in the past two years. According to the statistical information system of China's feed industry, in the first half of 2021, the output of meat and poultry feed in Shandong Province will be 12.92 million tons, with a year-on-year growth of 3.1%. Among them, the output of formulated feed was 12.764 million tons, up 2.7% year on year; The output of concentrated feed was 120000 tons, with a year-on-year increase of 82.3%; The output of additive premix was 36000 tons, down 1.0% year on year. The feed output of broilers increased by 8.1% YoY, while that of ducks decreased by 3.7% YoY. The output of meat and poultry feed in Weifang City and Linyi City, which are traditional meat and poultry breeding cities, increased by 9.4% and 1.5% year on year respectively, and the total output of the two cities accounted for 44.0% of the province's total; The year-on-year growth rate of Liaocheng City and Yantai City was 3.3% and 6.0% respectively.
In the first half of the year, the number of meat and poultry feed producers/groups in Shandong Province was basically stable at more than 330. However, due to the influence of the structure of breeding customers, the growth rate of output was differentiated. In the first half of 2021, there were 38 enterprises/groups with a meat and poultry feed output of more than 100000 tons, accounting for 83.8% of the province's meat and poultry feed output. Among these enterprises/groups, 15 had a year-on-year decline in feed output, and some enterprises/groups had a significant decline in meat and poultry feed output.
（5） The output of pet feed and ruminant feed increased rapidly, while that of aquatic animal feed declined
Pet feed production enterprises are mainly distributed in Liaocheng City, Linyi City, Heze City, Weifang City, Yantai City, etc. According to the statistical information system of China's feed industry, the output of pet feed (excluding snacks) in Shandong Province in the first half of 2021 will be 114000 tons, with a year-on-year growth of 70.2%; The output of Liaocheng City increased by 42% year on year, while that of Linyi City increased by 205% year on year. The degree of cage feeding of beef cattle and mutton sheep has been improved, and the feed consumption has continued to grow. According to the statistical information system of China's feed industry, the output of ruminant feed in Shandong Province in the first half of 2021 will be 441000 tons, an increase of 21.0% year on year. Among them, the cow feed output was 253,000 tons, up 9.1% year on year; The year-on-year growth rates of beef cattle and mutton sheep feed were 42.7% and 52.8% respectively.
According to the statistical information system of China's feed industry, the output of aquatic animal feed in Shandong Province in the first half of 2021 will be 151000 tons, down 7.2% year on year. Among them, the output of fresh water feed was 97,000 tons, down 12.2% year on year; The output of seawater feed was 53000 tons, up 3.6% year on year.
（6） The industrial concentration has increased, and the use of bulk feed accounts for more than a quarter
According to statistics, in the first half of 2021, the feed output of the top 20 enterprises/groups in Shandong Province will account for 61.0% of that of the whole province; Feed output in the first half of the year 10
The number of enterprises/groups above 10000 tons reached 31, and the feed output accounted for 66.8% of the province. Among these enterprises/groups, 80% carried out integrated operation, of which the output of bulk feed was 4.708 million tons, a year-on-year increase of 46.8%, accounting for 77.8% of the output of bulk feed in the province. In the first half of the year, Shandong's bulk feed output reached 6.052 million tons, a year-on-year increase of 38.0%, accounting for 27.2% of the province's livestock and poultry feed output, 2.6 percentage points higher than the end of 2020. Affected by the decline of breeding benefits, the output of entrusted processing feed decreased year on year. In the first half of the year, 313000 tons of entrusted processing feed decreased by 17.6% year on year.
（7） Enrichment of feed additives and steady improvement of scientific and technological level
According to the statistical information system of China's feed industry, in the first half of 2021, the output of amino acid products in Shandong Province increased by 41.8% year on year; The output of vitamin products increased by 16.1% year on year; The output of enzyme products increased by 77.8%. In addition, the growth promoting drugs and feed additives were completely withdrawn from the feed production, and the output of products such as acidity regulators and microorganisms also increased significantly.
（8） Actively adjusting feed formula to promote the reduction of corn soybean meal
According to the statistical information system of China's feed industry, the total output of single feed in Shandong Province in the first half of 2021 will be 8.154 million tons, with a year-on-year growth of 5.2%. 1.219 million tons of various cereals and processed products were produced, with a year-on-year growth of 2.5%, including 700000 tons of sprayed corn husk, with a year-on-year growth of 1.3%; Corn gluten flour was 450000 tons, up 8.5% year on year.
From the perspective of energy raw material supply and demand, according to the data of the National Grain and Oil Information Center, it is estimated that the corn output of Shandong Province in 2021/22 will be 26.79 million tons, a slight decrease compared with the same period. The consumption demand of corn feed is 26 million tons, and the consumption of deep processing is about 21.62 million tons. The annual corn supply and demand gap is about 17 million tons, and the supply and demand gap has narrowed. Most of the supply and demand gap is transferred from the northeast, and imported cereals (corn, sorghum, barley) and local grain processing by-products are supplemented.
The national corn price will continue to rise in 2021. In the first half of 2021, the average corn price in Shandong Province will be 2889 yuan/ton, up 47.6% year on year. Since August 2020, the price difference between corn and wheat in Shandong Province has gradually narrowed, and the use of wheat, bran, barley, sorghum and other corn substitutes in Shandong feed enterprises has increased significantly. It is estimated that in the first half of 2021, the proportion of corn consumption of feed enterprises in Shandong Province in total raw material consumption will decrease by 7.8 percentage points compared with that in 2020, and the corresponding proportion of wheat, barley and sorghum consumption will increase by 12.4 percentage points compared with that in 2020. From the perspective of supply and demand of protein raw materials, Shandong Province will produce 6.288 million tons of cake protein raw materials in the first half of 2021, a year-on-year increase of 4.0%. Including 5.811 million tons of soybean meal, up 2.7% year on year; 381000 tons of peanut meal, up 33.8% year on year; The cottonseed meal was 69000 tons, down 23.5% year on year. The production of animal by-products such as animal fat, meat and bone meal, feather meal was 369000 tons, up 4.2% year on year. The production of fermented soybean meal, fermented cotton meal, citric acid residue and other microbial fermentation products and by-products reached 128000 tons, up 21.5% year on year.
In the first half of 2021, the average price of Shandong soybean meal will be 3600 yuan/ton, up 25.9% year on year, or 740 yuan/ton; As the soybean meal price is at a historical high level and the terminal breeding profit is poor, Shandong feed enterprises adjust the formula, actively promote the reduction and replacement of soybean meal, and increase the consumption of peanut meal, cottonseed meal, etc. It is estimated that in the first half of 2021, the proportion of soybean meal consumption of Shandong feed enterprises in the total raw material consumption will decrease by about 2 percentage points compared with 2020.
Due to the large price increase of corn and soybean meal, feed enterprises have great cost pressure. In the first half of 2021, the price of formula feed for growing and finishing pigs in Shandong Province increased by 21.4% year on year, the price of formula feed for laying hens increased by 23.2% year on year, and the price of formula feed for broilers increased by 16.7% year on year. On the whole, the price increase of feed products is far lower than that of raw materials.
2、 Strengthen industry norms and promote high-quality development of feed industry
According to the requirements of the Notice of the General Office of the Ministry of Agriculture and Rural Affairs on Printing and Distributing the Work Plan for Feed Quality and Safety Supervision in 2021 (NBM [2021] No. 9), Shandong Province issued 1160 batches of feed supervision and sampling inspection plan in 2021. According to the average sampling of two batches of products per enterprise, 580 feed production enterprises were covered, accounting for 29% of the total in the province.
The provincial bureau announced the results of the grading evaluation of feed and veterinary drug manufacturers in 2020. By the end of 2020, there were 1991 feed production enterprises in the province. Except for 173 enterprises newly issued after July 2020, 1818 feed production enterprises were actually included in the evaluation. Among them, 576 enterprises (Class A) were evaluated as excellent in the annual evaluation, accounting for 31.7% of the total enterprises included in the evaluation; 1040 good enterprises (Class B), accounting for 57.2%; 187 general enterprises (Grade C), accounting for 10.2%; 15 enterprises were closed down due to demolition, poor management and other reasons, accounting for 0.9%.
The provincial bureau announced three provincial demonstration enterprises of Feed Quality and Safety Management Standards in 2020. So far, there are 21 national and 65 provincial "Feed Quality and Safety Management Standard" demonstration enterprises in the province. In order to shape the credit brand of enterprises, promote the further development of the scientific and technological level of Shandong feed industry, enhance the comprehensive competitiveness of enterprises, and promote the high-quality development of the feed industry in our province, Shandong Feed Industry Association continued to carry out credit rating evaluation on Shandong feed enterprises, and released the list of Shandong Feed Enterprise Credit Rating AAA enterprises (the fourth batch). We also checked the Shandong Feed Enterprise Credit Rating AAA in 2018, 2019 and 2020.
3、 Feed Industry Outlook in the Second Half of 2021
There is still great uncertainty in global economic and trade activities, and risk factors are increasing. In particular, the dividend of the meat market brought by African swine fever is declining, the profitability of breeding is declining, and even partial and periodic losses will become the norm. The impact of the breeding end on the feed industry will be gradually reflected. Loss of pig breeding and feed consumption may be less than expected. Although the process of pig production capacity recovery in 2021 will be difficult, it will have a great impact on market expectations. In 2021, the pig breeding income will decline, especially in June, the loss will expand, inefficient sows will be eliminated, and the market weight will drop, and the feed feeding volume may decrease; At the same time, the capacity invested and built by integrated large-scale group enterprises will be gradually released, and the proportion of internal feed consumption will be further increased, which will intensify the competition among commercial feed enterprises. In addition, the production efficiency and feed conversion rate of pig breeding may decline periodically due to the withdrawal of growth promoting drug feed additives in feed production, which will further require commercial feed enterprises to improve product quality and service capacity.
Poultry feed is expected to remain stable, and may decline periodically. With the recovery of the supply of live pigs and the decline of pork prices, the incremental space for poultry consumption has been suppressed in the short term; In the situation of overcapacity, the profitability of meat and poultry breeding will decline, and the breeding volume may be reduced periodically. The stock of egg poultry has bottomed out and the feed consumption will gradually improve. To sum up, Shandong Province has a large base of meat and egg poultry feed, and the space for further growth of feed is limited, and there is a possibility of phased decline in production and sales.
Adapt to market demand and accelerate transformation and upgrading. According to the requirements of Shandong Province's "Key Points of Animal Husbandry and Veterinary Work in 2021" and in combination with the development and changes of the industry, there is still a large space for the development and application of feed anti viral products; And in the situation of high raw material prices, it is conducive to further adjusting and optimizing the feed formula structure, promoting the reduction and substitution of corn and soybean meal, and actively promoting the use of "two low and one high" (low protein, low energy, high utilization rate) feed. Deeply promote the graded management of feed production enterprises, strengthen the social publicity of graded evaluation results, and increase the management and control of C-grade and non rated enterprises. We will strengthen supervision over the use of excessive amounts of copper and zinc in feed according to law. Strengthen the supervision of pet feed, and increase the inspection and enforcement of the implementation of the Measures for the Administration of Pet Feed and the provisions on pet feed labeling in the production link.