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Feed industry prepares for better conditions in 2010

By: Joel G. Newman

We all know the economy in the United States and around the world was affected profoundly by the economic turmoil of the last one to two years. We likely know family members, friends or others in our communities who have struggled mightily in these times.

The feed industry has not been immune to the difficult conditions. The dramatic escalation of corn prices and other commodity prices in the first half of 2008, combined with the following recession and the onset of the H1N1 influenza virus, took a large toll on the feed industry and our producer customers. All our members have engaged in retooling their business models and unfortunately some have merged or been forced to close their businesses.

Just as our members have done, we at the American Feed Industry Association have adjusted our model and pared back expenses wherever possible. We continue to offer high-quality educational programming, but we have stepped up our efforts to deliver the information and materials our members are accustomed to via webcasts, DVDs and other easier-on-the-budget methods.

However, our leadership on legislative and regulatory issues facing the industry remains a critical component of what we do on behalf of our members, and our focus has expanded to include state, national and international representation. Legislative and regulatory matters are complex and becoming more so each year.

As of this writing in mid-November, it is not easy to look too far into the future and forecast what may unfold in 2010. With the economic recovery unfolding tentatively, both domestically and globally, consumption of meat, milk, eggs and fish is showing signs of improvement. Producers have adjusted production, and increased exports are contributing to improving sales and prices. Most of the 38 countries that banned U.S. pork imports following the discovery of H1N1 here have lifted those restrictions, including China.

I believe that gradually the outlook for our members will become steadier throughout 2010. Demand and hiring will pick up, and bottom lines will improve. We anticipate most of our members and much of the feed industry at large will continue to watch budgets closely and adhere to a conservative business model, as will AFIA.

AFIA’s Safe Feed/Safe Food Certification Program, a significant and proactive industry program, continues to succeed and demonstrate the industry’s commitment to feed and food safety. The number of feed and feed-related facilities that have received certification in the last five years is approaching 400, and I am enormously pleased the members of the National Pork Board’s Pork Safety Committee deemed this exclusive program worthy of their endorsement in 2009. We plan to roll out an international version of the program in the near future, as a result of an alliance between AFIA and the EU Feed Additives and Premixtures Association, also known as FEFANA. I assure you we will continue to foster the Safe Feed/Safe Food Certification Program in various ways in the year ahead.

At AFIA, the only organization that represents the total feed industry, the staff and I are mindful each day of the challenges our members face. The association, founded as the American Feed Manufacturers Association, celebrated its 100th year of service with a Centennial Celebration in 2009. We published a hardcover book, produced a short film, launched a new logo and more to coincide with the anniversary of AFIA’s founding. Through these efforts to reflect on where we have been, we realized anew how our industry has faced great setbacks in previous decades. And with each obstacle, we have summoned our creativity, vision and just plain hard work to come through intact and ultimately stronger. And we will emerge from this current recession as a much stronger industry.