The Protein Era Challenges and opportunities for traditional and novel protein sources Sara Girardello - LMC International Ltd Feed Protein Vision, Amsterdam 6-7 th March 2018 2018 LMC International. All rights reserved. www.lmc.co.uk
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1. Why is the Protein Era emerging? 2. Demand for high-protein feed ingredients is increasing, but there are questions regarding the outlook for supply 3. New opportunities for meeting protein demand
Why is the Protein Era emerging?
Calorie disappearance per capita follows income growth Calorie disappearance per person (kcal/day/capita) Calorie disappearance and GDP per capita, 1975-2013 4,000 3,500 3,000 2,500 2,000 1,500 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Data source: UN FAO. GDP per capita (Real 2000 US$) Individual dots represent one country, for one year: 5
As income grows, the make-up of our diet also changes Share of calorie intake Share of total calories from different sources and GDP per capita, 1975-2013 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1,000 10,000 15,000 20,000 25,000 30,000 35,000 GDP per capita (Real 2000 US$) Vegetal products Dairy products Meat 6
Meat production is growing faster for certain species Production (millions tonnes) Share of total meat production Production of meat from cattle, pigs, poultry and aquaculture 120 Production of meat from cattle, pigs, poultry and aquaculture as a share of total meat 50% 100 45% 40% 80 35% 30% 60 25% 20% 40 15% 10% 20 5% 0 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 Aquaculture Bovine Meat Pigmeat Poultry Meat 0% 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 Aquaculture Bovine meat Pigmeat Poultry meat 7
Protein requirements vary by species Required protein content (%) Protein requirement of different livestock species and the required volume of protein required between 2015 and 2035 60% 60 50% 40% 30% 20% 10% 50 40 30 20 10 Protein feed demand (million tonnes) 0% Broilers Fish Pigs Layers Beef cattle Dairy cattle Protein-adjusted feed demand Protein requirement (%) 0 8
Only certain sources of protein will meet the requirements Protein content of major meals, concentrates & isolates Whey protein isolate Soy protein isolate Feather meal Potato protein concentrate Pea protein concentrate Vital wheat gluten Whey protein concentrate 80% Fishmeal Corn gluten meal Soy protein concentrate Poultry by-product meal Meat & bone meal Groundnut meal Soybean meal Cottonseed meal Rapeseed meal Wheat DDG Sunflowerseed meal Whey protein concentrate 35% Maize DDG Dry peas Corn gluten feed Palm kernel meal Wheat bran Rice bran Feed wheat Maize 0% 20% 40% 60% 80% 100% Protein content (% DM) Low Medium High 9
Supply of high-protein feed ingredients is limited Million tonnes Consumption of the main protein-containing feed ingredients (average 2015-2017) 20 Maize > 1 billion MT SBM > 220 million MT 10 0 Maize Soybean meal PAPs Fishmeal CGM SPC VWG SPI 10
The outlook for high-protein feed
Soybean is the most important source of vegetable protein % DM Soybean meal is the protein feed par excellence and the price benchmark for all other protein feed ingredients. Soy protein concentrate (SPC) and isolate are also attractive soy protein products. However, breeding programmes and expansion in new growing areas in the last 20 years appear to have resulted in a decline in protein content. Protein content of soy products Trends in soybean protein content Soy protein isolate 43% Soy protein isolate 42% Fishmeal Soy protein concentrate 41% 40% Soybean meal 39% Maize 38% 0% 20% 40% 60% 80% 100% Protein content (% DM) 37% 2001 2003 2005 2007 2009 2011 2013 2015 US soybean Brazil soybean Argentina soybean 12
Fishmeal supply constrained by TACs Fishmeal price, US$/tonne Ratio of fishmeal to soybean meal Fishmeal is one of the world s most important feed ingredients due to its nutritional profile. Fishmeal supply is restricted by Total Allowable Catch (TAC) quotas. Supply of fishmeal has been stagnant vs. strong demand growth, leading to a steadily rising price of fishmeal. Global fishmeal output vs. prices Fishmeal vs. soybean meal prices 2,000 8 7 6 1,600 1,200 800 400 7 6 5 4 Production, millions of tonnes 5 4 3 2 1 0 0 3 2001 2003 2005 2007 2009 2011 2013 2015 2017 1992 1997 2002 2007 2012 2017 Fishmeal price Fishmeal production 7x 5x 3.5x 2.5x Fishmeal:SBM ratio 13
PAPs are a reasonable substitute for fishmeal Million tonnes Although lower in protein than fishmeal (with the exception of HFM), they are a replacement for it. Aquafeed is the fastest-growing outlet of PAPs. In the EU, legislation and consumers attitudes towards PAPs have resulted in consumption falling. Demand growth in the region ultimately depends on legislative relaxation, Protein content of PAPs PAP demand by region Soy protein isolate 16 14 Feather meal 12 Fishmeal Poultry by-product meal 10 8 6 Meat & bone meal Maize 0% 20% 40% 60% 80% 100% Protein content (% DM) 4 2 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 South America North America Western Europe China South East Asia Other 14
Other plant proteins can gain from fishmeal supply issues Corn gluten meal (CGM) is a protein-rich co-product of maize wet milling. It is mainly used in the pig, poultry and aquafeed sector. Vital wheat gluten (VWG) is a high-protein co-product of wheat wet milling. It is increasingly being used in combination with legume proteins as a replacement for fishmeal in aquafeed. Protein content of CGM and VWG Soy protein isolate Vital wheat gluten Fishmeal Output of both CGF and VWG is driven by demand for starch and starch derivative products. Increase in CGM and VWG supply is therefore linked to the trends in this sector. Corn gluten meal Maize 0% 20% 40% 60% 80% 100% Protein content (% DM) 15
New opportunities for meeting protein demand
As the world gets wealthier, people consume more animal protein in the form of meat and fish. This will create more demand for feed protein. Due to cultural preferences and diverging trends in production costs, the type of animal proteins that we will consume in the future is expected to be different from the past. This will benefit poultry and, to a greater extent, aquaculture. These are very efficient at converting feed into animal protein. The catch is they need higher concentrations of protein. There is a range of high-protein feed ingredients available on the market. However, their supply is constrained by different factors. This tension between demand and supply is opening up opportunities for novel protein sources (insect, algae, single cell, etc). 17
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