Transcript
Speaker: Hi everyone.
Speaker: Welcome to Feed Strategy Podcast.
Speaker: I'm your host, Jackie Remke, Editor-in-Chief of Watts Feed Brands and Feed Strategy Magazine.
Speaker: This edition of Feed Strategy Podcast is brought to you by FeedStrategy.com.
Speaker: FeedStrategy.com is your source for the latest news and leading edge analysis of the animal feed industry.
Speaker: Today we're joined by Constance Coleman, President and CEO of the American Feed Industry Association.
Speaker: She is here to offer her thoughts on the outlook for the U.S. feed industry moving into 2025.
Speaker: Hi, Constance.
Speaker: How are you today?
Speaker: I am fantastic.
Speaker: Thank you, Jackie.
Speaker: And I hope you are well also.
Speaker: I am.
Speaker: I am.
Speaker: Thank you so much for taking the time to speak with me.
Speaker: We're here a week out from the IPPE event in Atlanta.
Speaker: So I'm sure you and your team are very busy.
Speaker: So I appreciate your time.
Speaker: Well, it's a pleasure and we are excited for IPPE and hope to see a lot of our friends and colleagues there.
Speaker: And we always do.
Speaker: So with that, let's get right into it.
Speaker: So here we are in a new year with a new administration here in the US.
Speaker: Now, based on the first set of executive orders signed by President Trump during his first days in office and his campaign promises,
Speaker: What sense do you get for the tone of his second term?
Speaker: And how do you think that may impact the agri-food sector?
Speaker: Well, can we take the tone fast and furious?
Speaker: His hand must be getting sore because he has been signing a lot of executive orders and executive actions.
Speaker: So as we have been looking through that, we are seeing the fulfillment of a lot of what he talked about on the campaign trail.
Speaker: He promised to take a hardline approach to trade with foreign countries and particularly those that he doesn't believe are serving the U.S. very well.
Speaker: So it really came as no surprise at the list of executive orders and actions that he has signed.
Speaker: We took a particular look at the America First Trade Policy Executive Order that he signed on his first day in office.
Speaker: And I think that is it really captures some of what I think the tone is going to be.
Speaker: It's a bold move and it's really undoubtedly going to overhaul U.S. trade policy.
Speaker: So we're going to be paying special attention as that rolls forward because we anticipate it's going to uncover some gaps, some inconsistencies and positions.
Speaker: in how those trade agreements have been used to some of the trade or adhere to and the trade relationships that the U.S. have that can be used to some leverage to perhaps get better adherence to the agreement and protocols that are outlined in those agreements.
Speaker: So I think that process is unlikely to be very easy and it's going to cause some disruptions.
Speaker: with some of the countries where we where the agri-food sector currently has some positive trade relationships, an area where the AFIA global policy team is going to be really intensely focused.
Speaker: So we're hopeful that the president will work to address some of those sanitary and phytosanitary issues and some of the technical barriers to trade that are out there.
Speaker: And we are
Speaker: We're really very intent on being in place with the administration right by its side, talking about how those barriers are affecting the U.S. animal food industry and then how we can engage to make innovation and growth happen here in the U.S. Speaking of tariffs, Trump is threatening a 25 percent tariff on Mexico and Canada.
Speaker: set to go into effect February 1st.
Speaker: In the event of these new tariffs being imposed on our major trading partners, how made this impact the US feed industry and how can AFIA members prepare for the potential downsides?
Speaker: Well, it's going to be tough, Jackie.
Speaker: Canada and Mexico are two of the U.S. animal food industry's top export markets, as many of us know.
Speaker: And I would argue that in many ways we operate as a North American industry rather than a Canada, a Mexico, or a U.S. industry.
Speaker: So we really do see the potential impact on the U.S. animal food industry of being pretty significant.
Speaker: There's three different ways that we're looking at that potential impact.
Speaker: First, our manufacturers import a lot of feed, key ingredients and pet food from both of those countries.
Speaker: We see product going back and forth throughout the stage of production of some of these products.
Speaker: And that means that the tariffs on those imports are going to increase the cost of producing animal food.
Speaker: it's gonna ultimately increase the prices of feed and pet food that consumers and farmers and ranchers see.
Speaker: Second, the US also imports livestock from Canada and Mexico.
Speaker: So tariffs could easily disrupt this trading balance and then negatively impact animal food sales.
Speaker: Because we anticipate if there's a slowdown in animals moving across the border into the United States to be fed, that or make it more expensive, we do see the potential for less animals to feed.
Speaker: And then finally, retaliatory tariffs from Canada and Mexico would be expected.
Speaker: And that's going to definitely impact the competitiveness of U.S. exports going into those two countries.
Speaker: So, you know, when we try to prepare for some of those types of things, we really are encouraging our members that are listening to this podcast to have transparent conversations with their suppliers.
Speaker: and their buyers in foreign countries.
Speaker: And take a look at their business plans, especially if they have locations in multiple countries.
Speaker: We're also encouraging our members in AFIA to reach out to our global policy team with questions and concerns because as we are visiting with the administration and with Congress, our staff would love to understand precisely some of the challenges that our members are having so we can voice those concerns.
Speaker: when we're speaking with administration officials, whether that's within the U.S. Trade Representative's Office, the Department of Commerce, or elsewhere, USDA.
Speaker: So, you know, really use your trade association, use your organization, let us know what they're hearing, and we can communicate that to policymakers.
Speaker: Great, great advice.
Speaker: Now, during our last conversation toward the end of last year,
Speaker: you highlighted how supply chain disruptions have created cascading effects on ingredient availability.
Speaker: What, if any, supply chain vulnerabilities are you concerned about in this moment?
Speaker: Jackie, right now our biggest concern is still maintaining that steady supply of key inputs.
Speaker: We have products, particularly key ones like vitamins and amino acids that are used in feed and pet food and indeed in food.
Speaker: in human food as well.
Speaker: During the last administration in Congress, we really began raising the issue with policymakers and sharing the fact that the United States imports a majority of its vitamin and mineral supply for both human and animal food.
Speaker: And that represents a huge risk to overall human and animal health, food security, and economy if we cannot access those vitamins and amino acids.
Speaker: As an example, China dominates production of both those critical nutrients.
Speaker: They account for over 70% of vitamin production globally and significant portions of key amino acids.
Speaker: Theranine, it's 91%, 84% of valine and 100% of some of the B complex of vitamins.
Speaker: So we've been working with trade officials to evaluate the current supply chain
Speaker: And we are working on taking some proactive steps to address the vulnerabilities around that supply chain.
Speaker: So while some of our policy recommendations are there to mitigate supply chain risks, they do really require longer term U.S. investments.
Speaker: So, for instance,
Speaker: investing in domestic manufacturing or developing allied partnerships with friendly countries.
Speaker: So nearshoring and friendshoring, we call it.
Speaker: Or we also are, you know, are in the short term, we're encouraging the Trump administration to
Speaker: to really avoid taking drastic trade measures that could disrupt supply chains.
Speaker: When you think about the U.S.-China relationship, we are inextricably linked as economies.
Speaker: And while there are some definite disadvantages in the way China runs their economy and does business versus the way we do and the incompatibility of that, we are still linked.
Speaker: So where we're beholden to one foreign supplier, we would really like strategic judicious action to be taken because we can't survive a complete and total and immediate disruption of supply chains.
Speaker: So it's going to take some finesse, Jackie, and a lot of, as we call it, tap dancing.
Speaker: But it does need to be addressed, but it needs to be addressed really strategically, recognizing the vulnerabilities we have.
Speaker: Well, a lot to watch from the AFIA's perspective and to keep a finger on that pulse.
Speaker: On the ingredient side, for decades, the feed industry has relied heavily on the FDA and AFCO's pathway for bringing new ingredients to the market.
Speaker: And as we know, that ended in October of 2024.
Speaker: And recently, the FDA introduced the Animal Food Ingredient
Speaker: consultation program with the issuance of GFI 294, which aims to create a more efficient and transparent review process.
Speaker: What specific elements of the AFIC do you see as the most promising for addressing the industry's concerns about review timelines and transparency?
Speaker: Well, just taking a quick step back, Jackie, you know that for years we've been urging FDA to modernize its regulatory review systems.
Speaker: because it's not kept pace with scientific progress and it certainly has not kept up with our international counterparts and what they're doing.
Speaker: So it's putting us at a competitive disadvantage.
Speaker: So let me just say, we're excited to see FDA re-examining its animal food ingredient programs.
Speaker: So speaking specifically about the new AFIC or animal food ingredient consultation process, we do see it as a major shift.
Speaker: We like the fact that the new guidance offers a structured pathway for ingredient manufacturers and innovators to consult with the FDA.
Speaker: We like that ensures that ingredient safety standards are met prior to market entry and that communication and opportunity to consult to make sure that that's in place is very, it's an efficiency add that we like.
Speaker: Also, animal food innovators are going to have the opportunity to engage with the FDA to provide data that demonstrates ingredient safety.
Speaker: And that is, of course, not new, but we believe that it will happen, the way it's laid out, that that will happen more smoothly.
Speaker: So, we also appreciate the guidance clearly specifying submission requirements so we know what the goalposts are, right?
Speaker: And that includes, you know, the type of data that's needed for an FDA evaluation and details the FDA's role in assessing that information.
Speaker: And that does address our industry concerns.
Speaker: So, we're pleased about that.
Speaker: So we're going to continue to stay involved and in communication with the FDA as they undertake a review as they implement AFIC.
Speaker: And also,
Speaker: You know, they're reviewing the food additive petition and the generally recognized as safe grass notification processes.
Speaker: And we're going to be talking with them just as we did as they while they were developing AFIC to make sure they understand where the industry is on it.
Speaker: Jackie, I think you probably saw just recently the Association of American Feed Control Officials announced its partnership with Kansas State University's, I think I've said that right, Olathe Innovation Campus.
Speaker: And they're looking to provide another scientific review for new animal food ingredients.
Speaker: So we're excited and we're cautiously optimistic that once launched that this new process is going to allow companies to have their ingredients submissions reviewed by a scientific panel.
Speaker: So it sounds like the panel is going to be comprised of subject matter experts from U.S. universities and some independent consultants that will then recommend provide recommendations back to the AFCO membership for final approval.
Speaker: So approved ingredients could then be included in AFCO's official publication.
Speaker: So we're excited to see potentially four new ingredient pathways for our members to utilize.
Speaker: So I'm feeling optimistic about that and really committed to working with both AFCO and FDA as they roll out some of these new approaches.
Speaker: Well, it sounds like there's a lot of modernization of these regulatory systems going on.
Speaker: Which leads me into my next question, which would be, can you please give us an update on the status of the Innovative Feed Act?
Speaker: Absolutely.
Speaker: The ultimate piece that we need, that final modernization that we need.
Speaker: Well, as we all saw and were disappointed by, the Innovative Feed Act did not pass the last Congress.
Speaker: But that doesn't mean that we're done.
Speaker: You know, the bill would have modified the regulation of animal food ingredients before.
Speaker: that really are all about non-nutritive label claims that are beyond taste, aroma, and palatability.
Speaker: non-nutritive claims such as reduced greenhouse gas emissions or food safety pathogens, improved animal performance, all of these things that the industry wants and farmers and ranchers are looking for and asking for.
Speaker: But unfortunately, as we all know, currently they're regulated by the FDA as drugs and not feed ingredients.
Speaker: So we definitely need to see the Innovative Feed Act change so that they are more appropriately reviewed as feeds because they all function in the gut of the animal.
Speaker: So if they can be reviewed as feeds through the food additive petition process, that would allow us to stay competitive with countries around the world that are looking at them as food as as feed ingredients rather than drugs.
Speaker: So taking a look at the new Republican majority Congress and a Trump administration, we are ready to get at it again.
Speaker: We're taking a look at the bill.
Speaker: We're going to look at what adjustments need to be made.
Speaker: And we'll be working with our partners to reintroduce an updated bill in the future.
Speaker: We still have strong support in both the House and the Senate to help our industry get that legislative fix that we need to really fix the dilemma that we're facing.
Speaker: Excellent.
Speaker: Well, that's good news.
Speaker: Absolutely.
Speaker: Yeah.
Speaker: Well, I have to say I read...
Speaker: one of your last blog posts and I really enjoyed it.
Speaker: So I have a few questions about that.
Speaker: So you attended a series of meetings in Rome between the UN Food and Agriculture Organization and the International Feed Industry Federation.
Speaker: And those meetings focused on sustainable animal agriculture and other related issues.
Speaker: What would you say has surprised you the most about how the conversation
Speaker: surrounding feed's role in global sustainability has evolved since you entered the industry.
Speaker: Well, it's very exciting, Jackie.
Speaker: There are very few times where you can see so quickly the impact of the industry's efforts.
Speaker: Because right now, even with all of the global challenges that we're facing, and we've talked about a few of them here today, the industry discussions that were happening with the Food and Ag Organization of the UN and the International Feed Industry Federation,
Speaker: really reflected a forward-thinking mindset.
Speaker: There was a focus on initiatives to improve and strengthen the animal food sector rather than simply responding to different crises that are out there.
Speaker: We saw efforts redirected from reacting to
Speaker: tackling progressive goals, or redirected to tackling progressive goals such as enhancing sustainability and advancing innovation.
Speaker: So that was very exciting.
Speaker: Well, let me share with you just how quickly things seem to have changed.
Speaker: Three years ago, the United Nations introduced its initiative, the UN Food Systems Summit, that was designed to transform the global food system, work toward achieving its 2030 sustainability goals.
Speaker: And we were understandably distressed because the main talking points were eliminating animal protein from diets in a way to achieve sustainability, prescribing specific food production systems.
Speaker: So we joined with many other food and ag industry members and helped lead the effort to call for a recognition of
Speaker: agriculture and the food systems need for diverse food systems, innovation, and diverse diets to help us achieve our sustainability goals.
Speaker: So that, and it worked and we were excited because the original trajectory that the UN Food System Summit was on got halted in its track because so many countries stepped forward and said, hey, wait a minute, let's talk about this from a more scientific perspective.
Speaker: And that meant that we had some space and opportunity to share the amazing,
Speaker: sustainability, innovation, conservation efforts that were already going on in the animal ag sector.
Speaker: So fast forward three years later, we've had three UN Conference of the Parties or COPs on climate.
Speaker: We've had hours of intense work.
Speaker: We've gone from a global call to eliminate animal protein from diets in the name of sustainability.
Speaker: and the inability to even have a reasonable conversation at COP 27, three years ago, to our recognition that animal ag can be a part of the solution to big issues, that it can reduce food insecurity and the environmental impact.
Speaker: And we've been invited to join in a variety of conversations at both the COP29 and we're already getting invitations for COP30 down in Brazil.
Speaker: What a sea change.
Speaker: And it's because the industry stepped forward and said, hey, wait a minute, stop.
Speaker: We have solutions.
Speaker: So that makes me very optimistic for the future of this conversation and discussion globally.
Speaker: With Trump's elimination of climate initiatives enacted by previous administrations and withdrawing from the Paris Climate Agreement, do you think that this sentiment will slow the momentum and adoption of sustainability programs within the U.S. feed industry?
Speaker: No, Jackie, I don't, because I believe that this is a bigger topic than a government policy issue.
Speaker: than government policy.
Speaker: It's very much a market driven effort right now, especially here in the United States.
Speaker: But more importantly, agriculture and especially U.S. agriculture is by nature sustainable.
Speaker: So, you know, whether we have called it sustainability or conservation or any of the other number of terms, I mean, when I was a kid, and I will tell you, Jackie, I am not a young woman anymore.
Speaker: When I was a child, we were talking conservation.
Speaker: We've been doing this.
Speaker: So generations of farmers and ranchers work the same plots of land.
Speaker: They're either growing crops or animals, and they recognize that the only way to maintain and grow it is to adopt plants.
Speaker: conservation, sustainable regenerative practices.
Speaker: It doesn't matter what the term is.
Speaker: It's all the same really in many ways.
Speaker: So for the animal food sector, it is the same.
Speaker: Sustainability is how we do business.
Speaker: And our domestic customers want innovative products that are gonna continue to support animal health and feed efficiency.
Speaker: And internationally, climate smart agriculture is not going away.
Speaker: to compete and stay relevant, animal food manufacturers are going to be working to deliver those really sustainable practices and products.
Speaker: And, you know, we can change what's deemed sustainable.
Speaker: We can change what's deemed climate smart and how it looks.
Speaker: But we've been at this game and we're going to continue to excel and lead the globe in it.
Speaker: Well, that's good news.
Speaker: Thank you for your thoughts on that.
Speaker: So we've discussed a lot of different things here so far.
Speaker: Of AFIA's main policy issues, where do you think that the association will see the most progress or change in 2025?
Speaker: So as you noted at the very beginning, we have a lot on the docket.
Speaker: But I do believe that we could see some key trade priorities addressed.
Speaker: We're very concerned or very interested in seeing some of those onerous or duplicative regulations removed.
Speaker: We saw that in the first Trump administration, and he has signaled his desire to continue to do that, particularly where regulations conflict or are duplicative.
Speaker: And then also a greater focus on promoting U.S. manufacturing industries that have really been a key part of our economy.
Speaker: So we, you know, as he has said very clearly, the president is focused on putting America first and helping Americans live some healthier lives.
Speaker: We know that some of the innovative solutions our industry is bringing forward can help achieve those goals.
Speaker: So we're going to continue to share where our industry has been hamstrung or unable or blocked by regulations to bring innovative tools forward.
Speaker: So we want to be able to address those things that are keeping them from the market or keeping business operations from moving forward.
Speaker: And we want to encourage the administration to consider some of the potential unintended consequences before pushing forward new policies that would certainly that would ban certain agricultural practices or supplies from being used within the industry.
Speaker: We are firm believers that the more tools in the toolbox that are available, the more we can meet the challenges and address the challenges and meet our goals that we have.
Speaker: So that is going to be our core message on some of that is we agree with the sentiment.
Speaker: We want to help share that every approach has consequences, and we want those to be clearly understood so we can get us where we need to be in the best way possible.
Speaker: Excellent.
Speaker: Thank you so much for your time, Constance.
Speaker: For more on the policy issues and other U.S. feed industry news, please visit www.afia.org.
Speaker: Thanks again, Constance, and thanks to you for tuning in.
