The feed manufacturing business has become increasingly challenging as manufacturers are squeezed between the volatility of the grain commodities market and the relative inflexibility of international food pricing. Feed manufacturers are under increased pressure to produce consistently high-quality feed at a cost that allows them to remain solvent in the face of increased ingredient prices.
Corn prices, for example, have risen significantly in recent years because of the expansion of non-feed applications, such as ethanol production, according to the United States Department of Agriculture (USDA). Couple rising ingredient prices with challenging international economic conditions and it is easy to see why feed manufacturers must reduce costs wherever possible to remain profitable.
One way for feed manufacturers to drive down overall costs is to maintain tighter control of their mix by using new, portable feed analysis technology. By reducing the time and expense associated with feed analysis, manufacturers are in a better position to increase productivity, and ultimately, profitability.
Rising Costs with No End in Sight
The overall demand for animal feed continues to grow. The global population is rising, especially in developing countries, in which higher incomes and increased urbanization are driving the demand for meat. According to the World Health Organization (WHO), for the large majority of people in developing countries, livestock products remain a desired food for nutritional value and taste. As a result, annual meat production is projected to increase to 376 million tons in 2030 from 218 million tons in 1997 to 1999.
The increased demand for meat has resulted in a corresponding increase in the demand for animal feed. Corn is the primary U.S. feed grain, accounting for more than 90 percent of total feed grain production and use, according to the USDA. Corn production has risen, but corn prices have also increased, adding to cost pressures for feed manufacturers who are not always able to increase their selling prices in response to increased ingredient costs.
In addition to rising ingredient costs, increased regulatory requirements are expected in the years ahead. Feed manufacturers expect that within the next few years, the USDA will move toward 100 percent feed testing, which will further increase the need for tight control of the production process to ensure quality and consistency.
Today, many feed manufacturers, particularly small to mid-size manufacturers, must send their feed samples to third-party laboratories to verify feed content and quality. These manufacturers spend between $40,000 and $80,000 per year to have their samples analyzed off-site and must wait anywhere between three and seven days for the results. In this case, the test results are representative of feed that was produced several days prior and, as such, are not useful for real-time monitoring and control of production quality.
As more animal producers begin to perform their own analysis of the feed that they purchase for their livestock, manufacturers will face increased risk of customer claims that must be paid when it is recognized that a shipment of feed did not meet their specifications. Customer claims are a growing threat to profitability for feed manufacturers in today’s market.
So what options do feed manufacturers have for reducing costs in today’s economic environment? One way is by taking feed analysis from the lab to the field with handheld, lab-quality near infrared (NIR) analysis.
NIR spectroscopy is widely used for quality control in the food and agricultural industries. Acceptance of the use of NIR began with the work of Karl Norris at the USDA, who developed quality methods for agricultural products. Today, NIR is an industry-standard tool for controlling quality and maximizing profitability.
Portable Technology for Anywhere, Anytime Feed Analysis