The Van Trump Report

Animal Food Industry and the Challenges Ahead

A new report from the American Feed Industry Association (AFIA) details several challenges currently impacting animal feed and pet food industries, including a lengthy regulatory process for new ingredients and persistent supply chain disruptions. Despite the headwinds, AFIA’s “2022-23 State of the US Animal Food Industry Report” forecasts nearly 5,650 US animal food manufacturing facilities will generate total sales of $267.1 billion this year. AFIA forecasts the estimated value of the animal food industry is on track to reach $48.8 billion by 2025.

Overall, the animal food industry directly employs some +80,000 Americans, providing $55 billion in wages, and $18.5 billion in local, state, and federal taxes. Additionally, US pet food manufacturers are contributing even more to the economy. In 2022, the value of US pet food exports was up +20% year-over-year. In volume, the United States exported 9 million metric tons of product in 2022, including dog and cat food, feed additives, premixes and compound feeds, alfalfa and hay, protein meals, and fishmeal. The full report is available HERE. Below are some of the highlights:
China over the last few years has actually been an increasingly important market for US dog and cat food. The country imported a record $264 million in dog and cat food products in 2022. Similarly, feed additive exports from the United States to China grew $91.5 million from 2020 to 2022. This is in part thanks to the establishment of a Phase One trade agreement with China inked in 2020, as well as an improvement to the facility registration process in China.

Vietnam has upped its pet food imports by +69% over the last five years, which the AFIA says poses an opportunity for US dog and cat food exporters. The association cited a burgeoning middle class and an increasingly knowledgeable pet owner population make Vietnam a key export market opportunity for pet food in the coming years.

Animal feed ingredient approvals continue to present challenges for the US animal feed industry. AFIA says it is stymied by slow confusing and unpredictable regulatory review processes that deters innovators from bringing their products to the U.S. marketplace. The AFIA has been working to increase resources within the Food and Drug Administration Center for Veterinary Medicine (CVM) to accelerate the ingredient review process. The result is the creation of the Division of Animal Food Ingredients, intended to focus resources on completing ingredient reviews more quickly.

Domestic supply chain bottlenecks also continue to increase manufacturers’ business costs, delay essential feed and pet food deliveries and call trade with foreign buyers into jeopardy. To help the industry battle these issues, the AFIA has supported the Ocean Shipping Reform Act, which was signed into law in June 2022 and addresses maritime disruptions that halted the movement of products at ports. The association also has called upon the Biden administration to intervene and broker deals regarding rail and port labor issues.  

State regulatory issues
present ongoing challenges for the industry as well. Currently, in collaboration with the Grain and Feed Association of Illinois, the AFIA is pushing back on a bill working its way through Congress (HB 1290) that alleges pet food labels are misbranded if they do not disclose the presence of major food allergens. This is despite the fact that animal food is exempt from the federal Food Allergen Labeling and Consumer Protection Act.

Hemp product use in animal feed is also a growing concern for AFIA. Along with American Feed Control Officials (AAFCO), the association is working to inform state lawmakers and agricultural leaders on the illegal, yet growing use of hemp products in animal food. However, these efforts did not stop bills in Mississippi (H 1071) and Minnesota (HB 100) from moving forward.

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