What is the current scenario of the animal nutrition market? To better understand the challenges faced by feed producers, in search of s that present an increasing quality to consumers, we spoke with Professor Wilson Rogério Boscolo, an expert on the subject.
Wilson Rogério Boscolo has a degree in Animal Science from Universidade Estadual de Maringá (1997), a Master's and a PhD in Animal Science, both also from Universidade Estadual de Maringá (2001 and 2003, respectively). Currently, he is an associate professor at Universidade Estadual do Oeste do Paraná. He has experience in Animal Science with an emphasis on Animal Nutrition and Feeding, working mainly on the following topics: Nile tilapia (Oreochromis niloticus), fish performance, nutrition and technology.
Check out the full interview.
What is the current scenario of the animal nutrition market like?
Prof. Wilson Boscolo: The animal nutrition segment is increasingly evolving nowadays. We are seeing the expansion of existing mills, the creation of new plants and the entry of new companies in this sector.
The demand for animal-based protein is very high. In addition, we also see the growth of the PET market, with the increase in the adoption of pets for companionship.
This change of habits demands food for these animals and in my point of view, this proves that animal nutrition is a booming market.
BRFi: What are the main characteristics of this market in terms of competitiveness?
Prof. Wilson Boscolo: Actually, this is a very competitive market. Basically, we have two animal husbandry systems. When it comes to animals for slaughter, we have integrated or verticalized companies, which are companies that supply their own feed, and we also have the market that sells feed to farmers.
In this scenario, especially in the second case, we see very high competitiveness and, because of this, companies try to differentiate themselves in some way. Often this difference is based on price. However, everyone wants to offer a good quality product because if you do otherwise, you will end up with a restricted public. Thus, companies try to outdo themselves to present some quality differential. In the end, those who offers better quality at a fair price will stand out in this market.
BRFi: Wich are the ways used by the industry to face the current challenges of the market?
Prof. Wilson Boscolo: There are two aspects that I see that have received major investments: increasingly productive and technological equipment, in addition to staff training, and a constant searchfor a supply chain that offers a better cost-benefit ratio.
Commodities have a fixed price, but there is a constant search for substitutes for these commodities that are able to deliver something more. In terms of animal nutrition, we talk a lot about formulating feeds at minimum cost, , i.e. making complete feed that meets all nutritional needs at minimum production costs.
Therefore, the matter of cost is fundamental. It is no use making the best feed in the world if its cost will be even higher than the kilo of the animal produced, regarding animals produced for slaughter. One example is tilapia, which has an average market price (US$/kg of live fish) of around US$ 1.5 and if we put all the additives available on the market for this feed, many times the kilo of feed will be more expensive than the kilo of animal, which makes it unfeasible. So the return on investment is important.
What is the importance of innovation in the animal nutrition market?
Prof. Wilson Boscolo: In the current scenario, feed reformulation and ingredient substitution are daily struggles for feed formulators. So, innovation often ends up being the main reason to stay in the market.
Speaking about ingredients, for example.All feed formulators use conventional ingredients, and that would be ideal. To make feed with corn, soybean meal, fish meal would be the best of all worlds, few ingredients to have quality control. However, with the high fluctuation in commodity prices, very high freight costs and the existence of more noble resources, such as zootechnical additives (amino acids, vitamins) and functional ingredients, and the dependency on imports, it is necessary to pursue other options.
In this situation, we need to work with inputs that provide us with a margin to work on the feed so that we are not so dependent on these conventional commodities. With this, there is a search for innovation especially in functional ingredients and zootechnical additives where you have a gain in performance, weight, feed conversion or survival rate.
For example, what are alternative ingredients to fishmeal? We have, for example, feather meal, blood meal, poultry viscera Flour. These alternative ingredients may have some nutritional deficiencies when compared to conventional ingredients. Plant-based sources, for example, may have antinutritional factors. That's where we need to overcome this loss of earnings.
Therefore, these innovative ingredients – zootechnical additives – provide improvement in performance, such as Chicken Protein Hydrolysate. So the industry often searches for alternatives with regional availability that can produce the same or even better results, thanks to some functional advantage.
Among all the aspects you mentioned, which do you believe are the main trends in the animal nutrition market?
Prof. Wilson Boscolo:Due to a need and lack of ingredients in terms of volume and quality, I believe the ingredients segment will receive the most investments and present more opportunities.
In animal nutrition, we work a lot with zootechnical indexes and one of the ones we consider most is feed conversion — that is, how many kilos of feed does an animal consume to gain one kilo of weight. Within the area I mostly work with it is common to have feed conversion rates, for both shrimp and fish farming, of approximately 1.5 kg for every 1 kg of weight. And through the inclusion of ingredients that improve the animal's metabolism, we want to reach a conversion rate closer to 1:1. So, if we manage to improve this index, we will have greater profitability combined with greater sustainability.
Within the pet nutrition segment, we need feeds that provide more health and longevity to animals. The chance of obtaining gains inside the mill with equipment is much lower than if we use higher quality ingredients to provide animals with more health — such as more natural, hypoallergenic and better digestible ingredients that improve the animal's health and metabolic parameters.
We have a lot to gain with farm animals and pets when we work with better, “smarter”, and healthfuller foods for animals.
And what would be the main characteristics of a high performance nutrition?
Prof. Wilson Boscolo:To make a good feijoada , you need good ingredients. So, to deliver high-performance nutrition, it is necessary to use good ingredients — good additives and good food to formulate feeds. Logically, having good equipment will provide you with a greater yield of these ingredients, with less loss.
First, attend to the nutritional requirements of the animal in question be it a dog, cat or fish. We always seek to use ingredients with good digestibility, good nutrient profiles and good palatability. But beyond this, the industry is looking for something more than just nourishment, it is looking to improve the animal's metabolism.
The other concern is about not generating too much waste in the environment. In this logic, a dog will produce a smaller amount of feces, thus generating less inconvenience. In the case of an aquatic animal, feces pollute the breeding environment. With swine, it happens the same way.
How is Brazil positioning itself in this market in comparison to other countries?
Prof. Wilson Boscolo We haven't lost anything in terms of technology and well-prepared professionals. Instead, compared to some markets, we are reasonably ahead. In terms of production, for instance, we are at the same level as North Americans.
I am more involved in the aquaculture sector, and if we compare our industry with others, we are growing a lot, following the growth of the internal market. The growth of aquaculture in Brazil was already expected, since we have the largest freshwater reserve in the world and an immense coastline that has not yet been explored for aquaculture purposes.
However, we need to grow with sustainability and, for that, we need to invest in the constant improvement of our feeds. These feeds represent about 70% of the cost of aquaculture properties, so whatever improvements we make harbor a big effect. In addition, we have other factors such as management and genetics, but, still, nutrition promotes a big impact.
What would you say to a professional who wants to engage in research in this area in terms of qualification?
Prof. Wilson Boscolo: I would say that this professional will have many challenges ahead because it is necessary to align performance and health improvement with cost-benefit ratio. There is a lot to be done in this area of animal nutrition research because it is possible to visualize the responses on a day-to-day basis when we improve a feed.
The professional must put himself in the place of the final buyer of the product he is researching and developing. Whenever I work on the development of a feed, I try to put myself in the place of the producer or final consumer, who relies on the return of that investment.
At the end of the day, if the producer does not profit from the activity, it does not become sustainable for the feed mill. So, he must provide increased profitability for the producer. Thus, the premise is to make and develop something that brings profitability while also respecting the environment.
Therefore, future researchers must specialize. Today we have numerous postgraduate courses, including free ones, in which you can get scholarships for a master's or doctorate in Brazil or abroad. When I was working on my PhD, they had few options, but today almost all public and private universities have courses in these areas.
I have also observed that many feed mills have hired masters and doctors to work since it makes a difference to have these people with with a higher degree of specialization in the area of animal nutrition.
We are constantly evolving in this world of new inputs, looking for specific ingredients that provide better results. In the past, feeds were made to meet crude protein demands and all was solved. Later, it evolved, and we started to meet amino acids needs. Today, we are talking about functional peptides and there are many other interesting topics. But for that, we need to study a lot and recycle our knowledge.