Panorama of feed raw materials in China in 2022: the industry concentration is low, and fish meal becomes a new track for industry development

At present, feed products in China are all made of single feed raw materials. The feed production in China can represent the consumption of feed raw materials in China. In recent years, China's feed output has shown a trend of increasing year by year, and the growth rate of output has increased substantially. In 2021, China's feed output will reach 293 million tons, up 16% year on year; The consumption of feed raw materials in China reached 293 million tons in that year. In recent years, the demand and consumption of feed raw materials in China have increased year by year. In 2021, the average price of China's corn market will reach 1.22 yuan/jin, a slight increase of about 5% year on year; The average market price of soybeans reached 5.61 yuan/kg, up 24.3% year on year; The market price of feed soybean meal reached 3623.92 yuan/ton, a year-on-year increase of 18%; The prices of major feed raw materials in China have risen sharply.

Enterprise pattern: the profitability of enterprises has been improved, and the industry concentration needs to be improved

In recent years, the gross profit margin of China's key feed raw material enterprises has shown an overall upward trend. In 2021, the gross profit margin of Baiyang, Zhenghong Technology and Jinxinnong will be 26.24%, 20.83% and 14.24% respectively; Among the three enterprises, Baiyang Co., Ltd. has the strongest profitability, and Jinxinnong Enterprise has the fastest profitability improvement. Most of the products in the feed raw material industry belong to the primary processing products of agricultural and sideline products. The industry entry threshold is low, and there are many types of products in the industry. The types of products produced by enterprises are single. The market share of enterprises in the industry is generally low, and the market concentration is low. In 2021, the market share of Baiyang, Zhenghong Technology and Jinxinnong will be 0.013%, 0.124% and 0.051% respectively.

Development trend: market demand continues to grow, and fish meal has become a new track for industry development

In the future, the scale of China's livestock breeding industry and aquaculture will be further improved. In order to pursue the industrial income of aquaculture, reduce the breeding cost and shorten the breeding period, the market demand for new and compound breeding feed products will further increase, the market for various feed ingredients will further expand, and the market classification of feed ingredients will be further refined, China's feed raw material industry will become a link in the industrial chain that feed production enterprises must complete in their production and operation. The market consumption of fishmeal in China is about 2 million tons, which is the largest consumption market of fishmeal in the world. However, the output of fishmeal in China only accounts for about 14% of the global fishmeal output. The domestic fishmeal market is highly dependent on foreign imports, and the industry market is broad.

Keywords: current situation of feed raw material industry, feed raw material industry chain, feed raw material enterprise pattern, feed raw material development trend

1、 Industrial chain: the market demand increases, and the price of industrial products rises

Feed raw materials refer to single feed raw materials, which can be used for direct feeding or configuration of compound feed, including 13 varieties, such as raw grain, soybean, soybean meal, corn, fish meal, amino acid, miscellaneous meal, additives, whey powder, oil, meat and bone meal, and cereals.

At present, feed products in China are all made of single feed raw materials. The feed production in China can represent the consumption of feed raw materials in China. In recent years, China's feed output has shown a trend of increasing year by year, and the growth rate of output has increased substantially. In 2021, China's feed output will reach 293 million tons, up 16% year on year; In that year, China's feed raw material consumption reached 293 million tons. In recent years, the demand and consumption of feed raw materials in China have increased year by year.

The market demand for livestock products and aquatic products in China is increasing year by year, the scale of livestock products and aquatic products breeding in China is expanding year by year, and the product output is generally rising. In 2021, the output of artificial aquaculture products in China will reach 52.8862 million tons, up 3% year on year; The output of livestock products reached 89899900 tons, a year-on-year increase of 16%. With the further improvement of the living standard of Chinese residents, the scale of China's livestock breeding and aquaculture market will further expand, the demand for feed products required for breeding will further increase, and the consumption of feed raw materials in China will further increase.

In modern animal husbandry and aquaculture, in order to increase the breeding output and ensure the breeding effect, single feed varieties are usually mixed in different proportions according to different breeding needs, and single feed raw materials are mixed into composite feed products. More than 80% of the feed raw material cost of livestock breeding and aquaculture comes from energy and protein feed raw materials, such as corn, soybean meal, rice bran, inferior flour, wheat bran, fish meal, etc., followed by stone flour, calcium hydrogen phosphate and other mineral and vitamin feed raw materials; As fish meal is rich in protein nutrition, it is generally used as an important animal protein additive in the feed production process. About 20% of the raw material cost of aquatic feed comes from fish meal.

In recent years, China's annual corn output has basically maintained a relative balance. In 2021, China's corn output will be 273 million tons, an increase of 5% year on year; As the sown area of legume crops in China decreases, the output of legume crops in China will drop significantly to 19.6552 million tons in 2021, a year-on-year decrease of 14%. The consumption of fish meal in China is about 2 million tons, which is the largest market of fish meal consumption in the world. However, the domestic production of fish meal in China is only about 700,000 tons, and the market product supply mainly depends on imports. In 2021, the import of fish meal in China will reach 1,823,400 tons, an increase of 40.1% year-on-year.

In the past two years, due to the international situation, epidemic situation, planting area and other reasons, the average price of Chinese corn market will reach 1.22 yuan/kg in 2021, a slight increase of about 5% year on year; The average market price of soybeans reached 5.61 yuan/kg, up 24.3% year on year; The market price of feed soybean meal reached 3623.92 yuan/ton, a year-on-year increase of 18%; The prices of major feed raw materials in China have risen sharply. By 2022, the market prices of corn, soybean and fodder soybean meal will keep relatively stable, while the prices of soybean and fodder soybean meal will continue to rise, with a large increase; From January to August 2022, the market prices of Chinese soybean and forage soybean meal will rise to 5.99 yuan/kg and 4294.63 yuan/t respectively, with year-on-year growth of 8.4% and 19% respectively. In 2021, the import price of Chinese fishmeal will reach 1497.84 US dollars/ton, an increase of about 9% year on year.

2、 Enterprise pattern: the profitability of enterprises has been improved, and the industry concentration needs to be increased

The production and sales rate of key feed raw material enterprises in China is about 100%. The production and sales of enterprises are stable, and the enterprises in the industry are basically based on sales. In recent years, the production and sales of Baiyang and Zhenghong's scientific and technological products have declined significantly. In 2021, the output will be 27300 tons and 362300 tons respectively, with year-on-year change rates of - 26% and 20% respectively. Since 2018, the compound growth rates have been - 7.36% and - 2.80% respectively; The sales volume of Jinxin agricultural enterprises has increased year by year. In 2021, the sales volume will increase by 69% year-on-year to 149300 tons, with a compound growth rate of 23.7% since 2018.

Among the three enterprises, Baiyang Co., Ltd. is different from the other two enterprises. Its main feed raw material products are fish meal, fish oil, etc. processed and produced with low edible value or inedible aquatic animals and plants and food processing wastes as raw materials. The enterprise has formed an industrial chain business model of fishing, breeding food processing feed and feed raw materials. In 2021, due to the low oil yield rate of fish caught in Mauritania, the main cooperative fishing area of Baiyang, the production and sales of fish oil will decline; After the start of China's domestic fishing season, due to the impact of climate and other factors, the catch is less and the supply of catch is insufficient, leading to the decline of domestic fishmeal production and sales of enterprises in China; Therefore, in 2021, the operating income and cost of Baiyang will decrease significantly, which will be 213 million yuan and 157 million yuan respectively.

The main feed raw material products of Zhenghong Technology and Jinxinnong both come from the purchase and processing of grain products. In 2021, the rise in the price of China's grain market will increase the operating costs of enterprises, and the rise in the price of feed raw materials will increase the operating income of enterprises significantly. The revenue of the two enterprises will be 34 million yuan and 337 million yuan respectively, and the operating costs will be 27 million yuan and 289 million yuan respectively.

In recent years, the gross profit margin of China's key feed raw material enterprises has shown an overall upward trend. In 2021, the gross profit margin of Baiyang, Zhenghong Technology and Jinxinnong will be 26.24%, 20.83% and 14.24% respectively; Among the three enterprises, Baiyang Co., Ltd. has the strongest profitability, and Jinxinnong Enterprise has the fastest profitability improvement.

Most of the products in the feed raw material industry belong to the primary processing products of agricultural and sideline products. The industry entry threshold is low, and there are many types of products in the industry. The types of products produced by enterprises are single. The market share of enterprises in the industry is generally low, and the market concentration is low. In 2021, the market share of Baiyang, Zhenghong Technology and Jinxinnong will be 0.013%, 0.124% and 0.051% respectively.

3、 Development trend: market demand continues to grow, and fish meal has become a new track for industry development

1. The market demand continues to grow, and the industry has broad prospects for development

With the further improvement of Chinese residents' economic level and the recovery of their consumption level, the demand for meat products and aquatic products will further increase. In the future, the scale of China's animal husbandry and aquaculture will further increase. In order to pursue the industrial income of aquaculture, reduce the breeding cost and shorten the breeding period, the market demand for new and composite breeding feed products will further increase, The market of various feed ingredients will be further expanded, and the classification of feed ingredients in the market will be further refined. China's feed ingredients industry will become a link in the industrial chain that feed manufacturers must complete in their production and operation.

2. The industry cost continues to rise, creating continuous pressure on the terminal breeding industry

As far as the current market price of industrial products is concerned, in 2022, the price of feed raw materials in China will continue to rise. Although it does not pose a threat to the profitability of feed raw material manufacturers, it will cause serious pressure on the cost of the downstream feed industry, which will be transferred to the terminal aquaculture industry, making the cost of China's aquaculture industry continue to rise, posing challenges to the profitability of enterprises in China's aquaculture industry. In the future, the industry cost pressure may continue to exist, which will have a huge impact on China's feed raw material industry and downstream and terminal industries, so we need to continue to pay attention.

3. Fish meal has become a new track for industry development, and industry concentration is expected to increase

There are many kinds of products in the feed raw material industry, but the products with high market demand are agricultural and sideline products such as corn and soybean meal. The product with the highest market demand and consumption is fish meal. Because of its rich protein nutrition, it is generally used as an important animal egg white additive raw material in the feed production process. Its market consumption is about 2 million tons, which is the largest consumption market of fish meal in the world, However, China's fishmeal output accounts for only about 14% of the global fishmeal output. The domestic fishmeal market is highly dependent on foreign imports, and the industry market is broad; In recent years, the profitability of Baiyang Co., Ltd., an enterprise operating mainly with fish meal as feed raw material, has continued to improve, and its market share has risen slightly. The industry has good development potential. As major enterprises in the industry gradually form an industry chain, the production and marketing of products in the industry may be expected to focus on leading enterprises in the industry.