Increasing raw materials prices, availability of quality raw material, increasing fuel prices, availability of skilled labor, new regulations, etc. are some of the issues that are faced by the Indian animal protein industry. A recent addition is Russia-Ukraine crisis.
With Dr Jeetendra Verma, Think Grain Think Feed connected with four of the industry experts consisting of an integrator, a professor, and two experts who are guiding Poultry integrators and feed millers in India and Abroad. To know their viewpoints on how the industry is responding to the above challenges and adopting alternatives, please read the below excerpts.
Russia-Ukraine impact on the Indian feed industry
India used to import 80-85% of sunflower oil from Ukraine but due to this ongoing crisis, the import has stopped which resulted in approx. 30-40% increase in edible oil prices like rice bran oil prices have shot up by 40% to 140 Rs/Kg from 100 Rs/Kg. Using rice bran oil is a common practice in broiler feed. So is with other ingredients like crude soybean meal is at 160 Rs/Kg. Hence, it is no more economical to use soybean, sunflower, or rice bran oil. Previously, finisher broiler diets were prepared using 3-4% edible oil and at present, the least-cost formula does not permit more than 1-2% inclusion rather least-cost formulation is taking more grains.
Sunflower cake imported from Ukraine was getting used in layer feed which is also stopped. In nutshell, it is right to say that this crisis is badly impacting the animal protein industry.
Soybean meal (SBM) and maize – Is India short of these ingredients?
India produces a sufficient quantity of about 10-12 MT of soybean meal and the poultry industry needs approx. 5.5-6 MT for broiler, layer, and breeders, and the rest goes for aqua, cattle feed, and human consumption. The only issue is holding by traders which is the main cause of abrupt price increase and if it can be controlled there will be no shortage of soybean meal in the country.
Maize production in India is approx. 23-25 MT per year which is again enough for the poultry industry, starch production, and human consumption. But here again, the issue is holding.
Alternatives to soybean meal
The Indian government is encouraging ethanol production and hence plenty of rice, maize, and jawar DDGS, a by-product from ethanol production is available. It is a good source of energy-containing 2700-2800 calories per kg and protein of 40-45%, and fairly good amino acid composition except for lysine. The limiting factor is cannot be stored for more than 1 month because of fungal growth and mycotoxin presence. I recommend using 5-10% DDGS in the formulation and if it is of good quality, it can be used up to 15%.
Insect protein – A huge opportunity in India
In Europe, Insect meal is a widely accepted product while it is only at the research level in India. But there is a huge quantity of silkworm pupa is available after silk production. It is a rich source of protein of 50-60%, energy of 3000-3200 calories, oil content of 15-20%, and good amino acids composition. The limiting factor is the high moisture content of 20-25% so it cannot be stored without processing. The only solution would be to immediately dry it. Entrepreneurs should commercialize this technology which can revolutionize the Indian poultry industry.
Mustard and Rapeseed cake
The mustard cake is available at a reasonable price throughout the year with a protein content of 35% and good amino acid composition. The limiting factor is the anti-nutritional factor and it should not be used more than 5% in poultry feed and can be used up to 5-10% in cattle feed.
Sunflower meal is very expensive and high in fiber, so, it is not economical to be used in poultry feed. Cottonseed meal is an excellent ingredient for cattle feed but it may not be good for poultry feed.
30 years back, the main ingredients in poultry feed were groundnut meal, dry fish meal, and grains. Good quality groundnut extraction has a protein content of 40-45% and can be used up to 10% but the presence of aflatoxin is the limiting factor.
Alternatives to Maize
It can be the best alternative to maize with negligible mycotoxins and NSP. There is a huge quantity available in AP, Punjab, WB, and many other states. The limiting factor is sand, silica, and fiber. So, it is recommended to prefer good quality rice broken and it can even be a complete replacement for maize. In AP, when maize prices increase, they are completely replaced with rice broken. Another issue is a change of egg yolk color to pale or skin color in broiler or breeder to white. To overcome this issue, it is recommended to use 4-5% of maize gluten meal, a by-product in the starch industry with 60% protein and very rich in methionine. Commercially available pigments can also be used for better color.
There is plenty of bajra available in Rajasthan and Haryana at a cheaper price. It is an excellent source of energy and even protein content of 10-11% which is better than maize with 8% protein, and better amino acid composition than maize. Again, the color would be an issue and pigment sources can be used.
Deoiled rice bran (DORB) is widely used in layer feeds. It is available throughout the year at a price of 11-14 Rs/Kg with an energy of 1500-1800 calories and protein of 13-17%. Good quality DORB can be used up to 15-20% in layer feed and 4-5% in broiler feed.
Availability of conventional feed raw materials
Dr Uday Patel: All these issues of quality, availability, and price did not happen in the last 3 years, but this has been the case for a long time, even back in 1995, when broiler farming was just introduced in India, there was a problem with soybean suppliers and a lot of adulteration in soybean meal. It was majorly layer industry at that time and the main ingredients were groundnut meal and rapeseed meal, sunflower meal, fish meal while soybean was never considered as the main ingredient. It started getting popular after the year 2000, mainly with broiler industry.
Over the years, whenever there is a change in the demand vs production/supply scenario or export scenario cause a sudden increase in one ingredient priceand many a time it has been compensated by using alternatives.
Fortunately, this year groundnut meal is available at a cheaper rate but 10 years back when soybean prices shot up guar meal was available at a cheaper price. There was a sudden jump in soybean prices from 25 Rs/Kg to 45 Rs/Kg then at that time guar meal was available below 20 Rs/Kg. At present both soybean meal and guar meal prices are at 62 Rs/Kg. This year groundnut meal, rice DDGS and rapeseed meal are two key ingredients that can save the industry. As a nutritionist, all ingredients are the same we just need to balance their pro & cons.
Integrators – providing feed across the country how do they manage on quality and cost?
Basically, the integrators have different formulations (different ratios of ingredients) in different states with one objective that the end-product should remain the same. Corn price is 26 Rs/Kg so everyone is stocking it, feed millers might have opted for 50-100% replacement with bajra or rice-broken in broiler and layer diets. But this year, bajra is not available in the North and West. Usually, broken rice remains available at a cheaper price but as per recent development there is limited rice inAndhra Pradesh and Telangana. I am sure the industry will find its way out.
DDGS is another alternative which is widely available, would you please share your viewpoint how does it impact the quality of chicken?
It is my favourite ingredient, if rice DDGS is from a plant with good quality control during the drying process then we get rice DDGS with the best availability of nutrients and this can be used up to 10% in broiler finisher diets to produce the best meat quality. The balanced amino acid profile of rice DDGS takes care of many amino acids that soybean meal alone cannot.
Dr Jeetendra: When the industry started using soymeal instead of fish meal and maize then they started adding lysine and methionine which were the limiting factor. Today, it has become a huge business.
How African or Arabian countries are formulating their feeds?
Arabic countries are totally dependent on imports; hence they don’t have any choice but to plan for at least 3 months. Once the material is available then the feed miller has to formulate around those ingredients.
North and South Africa has opposite seasons, so when corn and soy are available in the South, in the North wheat is available. As union of African countries have been made, transport has also become very effective. Being non-GMO soybean producers except South Africa, they have huge potential to export soy seeds to the countries demanding non-GMO. But the scenario is not same as that of 5 years ago when they don’t have good access to the international market. For the last 2 years, they are equal players in exports across world. Like last year, in Malawi, soybean prices have gone up to 700-1000 kwacha from 250 kwacha per Kg and at present, it is again 1000kwachas per Kg, but limited availability.
Russia-Ukraine crisis impact on the Indian feed industry
Initially, my prediction was availability of wheat at a cheaper rate for this year. But due to this ongoing crisis, I am not sure anymore. In the last week, the corn price has gone up to 26 Rs/Kg, now corn is out, rice is out and so is bajra. We were relying on wheat but now there is an international demand for Indian wheat which was previously bought from Ukraine and our Prime Minister said the wheat crisis is going to happen, as we are partners in global trade so this demand cannot be denied. This year the industry must be more worried about cereals – the energy sources instead of soybean. Adding oils (165 Rs/Kg) or animal fat (125 Rs/Kg) is also very expensive.
Layer feed consolidation
I don’t think consolidation can take place in the layer industry like it did in the broiler industry. Though some consolidation has taken place in a few states, but it is not going to be big integration. The scenario is the same even globally.
Dr Jeetendra – Layer farmers are making a consortium of 4-5 farms, bargaining at one price for buying raw material and selling eggs.
Godrej, Venky’s, Baramati Agro, Sneha chicken, Suguna, Shalimar, Skylark, and many others were selling chicken in various outlets as fresh chilled chicken with a shelf life of three days and hygienic chicken.
Now there is a lot of frozen chicken available in the market because of infrastructure. The biggest game-changer is putting the frozen chicken in the military requirement by the Indian government which was some 5 years ago. Even today, the highest consumption of frozen chicken is in the military.
Of course, brands like Licious, tender cuts, etc. are acting as marketeers for the poultry industry and have increased the awareness of good quality chicken. But by using terms like without hormones or steroids, which is never been used in the industry, they are doing harm to the industry which is totally unacceptable. If you don’t know the business, don’t spoil it either. They are just 0.1% of total Indian business.
Dr Jeetendra: There is more awareness and consumption because of such brands. But I would more appreciate models like Nandu’s Chicken which are producing, processing, and selling the chicken. How this model develops in the future is yet to be seen in the near future.
Best alternative to conventional feed raw materials
As such I don’t prefer to use alternatives in my formulations as it has many consequences. But still, I would only recommend using the best quality alternatives like sterilized fish meal and MBM @ 1% inclusion only. Using corn or rice DDGS may result in a price reduction of 3 Rs/Kg for the live bird but quality also gets affected. Though I have seen some players using it up to 4-5% while with us up to 1% gave satisfactory results.
Suggestions for integrators and feed millers
I would suggest them to concentrate more on procurement. Say if amino acid prices are increasing one should plan to store it for 2-3 months. Similarly, soybean can be stored for 1-2 months. Instead of instant volumes, integrators should focus on basic infrastructure to face any challenges that may be raw material quality, season, or any others.
Learnings from challenges
Last year, the biggest challenge was too much soybean contamination but I believe that the job of an entrepreneur is to turn challenges into opportunities. To overcome this challenge, we have invested in a soy cake extraction plant. Gut health is most important and should not be compromised for which we need the right quality production. Moreover, proper raw material quality would also reduce additive cost.
Today, when we are talking the maize price is at 22.50 Rs/Kg which is an increase of 20% compared to last year. Again, procuring at right time is the solution and maize storage can be planned for 3-6 months with periodic fumigation.
Country comes first
We are the only company with 5 ISO certifications, dealing with seven segments viz. breeding farm, broiler farm, feed milling, hatcheries, processing plant, institutional supply, and retail outlets, with a gross margin of 7%. We have been into retail for more than 20 years now and have 40+ retail outlets where we still follow the same mantra of No Compromise. Even our retail prices are 30-40 Rs/Kg are higher compared to other retail outlets but we believe in delivering best quality even better than European standards. Transparency and quality are our topmost priorities and for us country comes first, we might not earn big profits but we make sure to clear all our payments on time,
We are coming up with the world’s greatest hatchery with a capacity of 3.3 million Eggs per month and the next aim is to reduce FCR by 4-5 points. We have also invested 3 crores in a solar project of 300 KW with battery bank. Breeding Farm totally run on Solar Energy.
Use of alternatives in different regions in India
The industry behavior towards using unconventional feed ingredients is different in different regions. Feed mills located in Northern region were seen to be more liberal towards using unconventional ingredients whereas those located in Eastern part were more conservative in their approach. Also, the end user in eastern part was seen ready to pay the extra price for the sake of consistency in quality. Even in neighboring countries, like Nepal, the leading players preferred to stick to the conventional ingredients in order to maintain consistency in quality.
As a nutritionist, I feel there is a lot of risks involved in using unconventional raw materials. The biggest factor is to identify a reliable vendor/producer. Secondly, standardization of the quality parameters of these ingredients. Sensitizing your analytical labs towards possible adulterations.
Until and unless you have handled that particular ingredient yourself, it is hard to guide the clients/feed millers with its pros and cons. Only referring to available data and published research is not sufficient.
Indian feed Industry in crisis
I have never seen this kind of steep commodity price rise in the last 20 years. Starting first quarter of 2021, it proved to be an exceptional year in terms of raw material price rises and availability and this may continue up to the end of this year. Both conventional energy and protein sources being used in poultry diets were on all-time high. This trend has to settle down somewhere and my anticipation is, although we might never get to see 2019 prices but it has to be much softer as compared to the present situation.
The feed industry could not anticipate such drastic price rise and erratic supplies leading to dependence on various unconventional feed ingredients. This price rise has led to huge rise in capital involvement both of the feed miller as well as of the farmer bringing the industry in a panic mode.
Rice DDGS – as an alternative
This was initially used in central and north India, but I still do not know how many of us really understand this byproduct. In case of rice DDGS, the biggest concern probably is the drying process. Even sun dried DDGS is also available in the market. In case of in line drying, temperatures need to be closely monitored for better product outcome.
Profitability with conventional raw materials
Let’s take soybean meal getting partially replaced by DDGS, although we can check routine proximate principles in our lab but it’s not always possible to assess the solubility of the proteins and ultimately affecting the bioavailability of the amino acids as well as the metabolizable energy (ME) values. The variability in the product might be a constraint in using it in higher inclusion levels.
I used this ingredient with little success probably because of inconsistency in quality. In spite of maintaining similar specs on paper, performance at field levels were not found to be the same. The performance of the birds,in such cases is to be monitored very closely and precisely. The difference in performance of the bird becomes less evident when you are already on a very low plain of nutrition.
Replacement of Maize with bajra, jawar, rice broken can be another example. A common perception is ME of rice broken and maize are same which according to me probably is not true. The CP in rice is also highly variable. Thus, direct replacements may not be a wise idea.
Though there can be a customer for every kind of feed available in the market. Although using an unconventional feed raw material apparently reduces the feed cost but ultimately might lead to increase in cost of production for the farmer, until unless we have got a very thorough understanding of the possible variabilities which should have been accounted for.
All this technical knowledge is of realvalue when you are trying to exploit the genetic potential of the bird to the fullest.
We are yet to understand the behavior of these unconventional ingredients. As such we should define the inclusion levels to be strictly adhered to, in order to minimize the variability in the formulation which might happen otherwise, thus defeating the sole purpose of feed cost reduction.
My suggestion would be better not be too much greedy with usage of these ingredients.
This has been an interesting interaction with all four experts. In my opinion, the feed miller or integrator should use quality ingredients whether it is conventional or unconventional. Also, if you are successfully using any unconventional ingredient, then share your experiences with a wider audience through such platforms or social media. At end of the day, the industry would grow with combined efforts. I would also encourage entrepreneurs to consider silkworm pupa production which can be Insect Meal of India