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ADM-Alltech joint venture creates 'Top 3' North American feed company
892 Plays6 months ago
Pierre-Joseph Paoli of ADM Animal Nutrition reveals how shifting trade flows, persistent heat stress and emerging respiratory diseases are creating new challenges — and opportunities — for feed producers. Plus, provides details about ADM's joint venture with Alltech.
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Transcript
Introduction to Feed Strategy Podcast
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Hi everyone, welcome to Feed Strategy Podcast.
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I'm your host, Jackie Remke, Editor-in-Chief of Watts Feed Brands and Feed Strategy Magazine.
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This edition of Feed Strategy Podcast is brought to you by FeedStrategy.com.
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FeedStrategy.com is your source for the latest news and leading edge analysis of the global animal feed industry.
Feed Industry Trends for 2026 with Pierre-Joseph Paoli
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Today we're joined by Pierre-Joseph Paoli.
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president of growth and commercial excellence with ADM Animal Nutrition.
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He's here to discuss the issues and trends the feed industry should watch in 2026.
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Hello, Pierre-Joseph.
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How are you today?
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Hello, Jackie.
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Very well, thank you.
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Thanks for having me on the podcast.
00:00:52
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Excellent.
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Thank you so much for taking the time to speak with me today.
Top Three Global Feed Industry Issues
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In preparation for annual feed industry outlook report, I'd like to ask
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industry stakeholders to define and describe the top three issues the global feed industry will face in the next 12 months.
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In your opinion, which critical issues do you feel the feed industry should have on their radar?
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So I think one of the first way animal production will take place and how the trade flows will evolve in particular, based on the evolution of the tariffs that are being put in place.
00:01:33
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That's a very general comment, I would say.
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But it is important because then it will shift the center of gravity of production of some species from one region to another.
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So that's a very general view.
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Then afterwards, I think you need to get into the details of each species and how they're affected by specific issues, regardless of where the production takes place.
Environmental Impacts and Feed Conversion Challenges
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And not necessarily going into specific detail, you know, poultry, swine, ruminant, etc.
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But I would say what we have on our radar at the moment is, in general, feed conversion and mortality issues across the board that could be addressed and bring some profitability into the value chain.
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We have identified some specific issues during the year, which were around heat stress affecting the robustness of the animal.
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And again, this is across the board and across species.
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And then finally, we have a certain number of environmental impacts that are coming from animal protein production.
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One of them is, of course, very well known around the carbon footprint in dairy.
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But we also could look at the downgraining of eggs in layers or something like late mortality in shrimp production, depending on the regions.
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So these would be the specific opportunities for improvement that we see in the year.
ADM's 'Next Generation Thinking' Strategy
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Here at ADM, in order to give a little bit of structure to these different issues, we like to group them around three main pillars.
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The first one is animal performance, and this is all about bringing the animals to their full genetic potential.
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The second one is the robustness of the animals.
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So once you've brought them to their full potential, keep them there for as long as possible.
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And the last one being the environmental impact, which is that once your animal has their full potential and staying there, then you minimize the impact that those production have on their environment.
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The way we capture those three together is in what we call our next generation thinking, which is a little bit of a play on word around the solutions that we are bringing, which are innovative and therefore the next generation, but also enabling our customers and the farmers we work with to continue operating for generations to come.
00:04:21
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Looking even further ahead, what do you think will be the most disruptive force to reshape animal nutrition?
Technological Advancements in Animal Nutrition
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In addition to scientific development that help us understand the physiology of the animal and the mode of action of the feed, I think the biggest change would be the technology advancing at a rapid pace and therefore using this data into animal nutrition in order to support the development around the three pillars that I've mentioned before.
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The buzzword at the moment is AI, and we see this a lot, including in the valuation of companies.
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I don't know if that is directly applicable into animal nutrition, but I think for sure, technology and digitization of the data is a very important trend.
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This enables the farmers to take the right decisions at the right time.
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It is also important to manage this in a way that you do not get overwhelmed because too much information at the end of the day is not very usable.
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At ADM, we have put this under an umbrella that we call the Synchro Solution and Services and a suite of software that enable our customers and farmers to remain competitive and productive all the way through the cycle.
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We try and synchronize across the different operations, which is controlling your raw materials, making your feed formulation, and then checking the performance of the animal.
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We synchronize the flow of data and also looping it back if you are not getting the results that you want to make adjustments.
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So this new set of tools came from different pockets of excellence that existed inside the different countries at ADM Animal Nutrition.
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And we've pulled together into a suite of software and application that we make available to our customers.
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So technology, we think, is important, and we are taking steps to be present in that space.
Evolution of Feed Additives and New Product Launches
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What emerging feed additive technologies or ingredient categories in general do you think represent the greatest growth opportunities?
00:06:45
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So I think there's certainly evolution of science and better understanding of the animal physiology and the different physiological pathways and therefore inventing new feed additives and really understanding their mode of action.
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So I come back to three pillars.
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What can we do today through the services and this additive to increase the performance of the farmers?
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What can we do to maintain the animal robustness throughout their life?
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And finally, how can we minimize the environmental impact of the animal production?
00:07:26
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I'm, of course, a great believer in development of new additives.
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We are present in a large number of categories with ADM Animal Nutrition, and we've rolled out throughout the year some improved additives with additional data on products that have been in the market for a while, all completely new concepts which are answering some of these issues that we've identified.
00:07:54
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So you mentioned feed additives.
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Let's dig a little deeper into that.
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I think the 25 and most likely 26 were relatively good years in animal production.
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The raw materials that go into the feed were at lower levels than previously, while the protein prices were significantly higher than in previous years.
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So we've seen an increased demand for performance.
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A couple of examples, we worked in dairy farming, trying to help the producers increase milk yield in transition cows.
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So we have a feed additive, which is called the Nexulin, which is bioactive or botanical plant extract.
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And out of this, we are generating an increased milk yield in transition cows.
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This has been very successful so far, and I would expect it would continue the same in 2026.
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Another example we had in our portfolio is the extract 6930.
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We've done some work previously on its performance side, but also working with lifecycle assessment and understanding how the use of the additive will reduce the carbon footprint in broiler production.
ADM and Alltech Joint Venture in North America
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ADM recently announced a joint venture with Alltech expected to launch in the first quarter of 2026.
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What synergies do you anticipate between ADM's supply chain capabilities
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and Alltech's nutrition science expertise.
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The scope of the collaboration, and I know questions have been asked on what was happening more globally between ADM and Alltech.
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To be very precise, both ADM and Alltech have a long history, respectively, in animal nutrition.
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If you saw Mark Lyons nicely posted that ADM were the very first customers when Alltech first launched.
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But what we're talking about here very specifically
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is the feed business in North America, which is the US and Canada.
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So this is not affecting the operations outside of that geographical area.
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And it's also not affecting anything that is not directly related to feed in that region.
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So, you know, we were talking about feed additives.
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Of course, Hultec is well known with their range and the same with ADM.
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These two continue completely separately.
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What is happening in the US is we're actually creating a new company.
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This will have on its board people from both ADM and from Alltech.
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The reason why we're doing it is because in feed, it's very important to have a certain scale because the reach that you have to your customer is important to your success.
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And so by putting these two businesses together, we're now in the top three in the region.
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And our expectation is that now that we have acquired that scale, we will continue to grow and develop that business in North America and in the US.
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The JV itself will, of course, as it is today, continue to procure its premix and its feed additives.
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Some parts were already supplied by Alltech and this will continue.
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Some parts were already supplied by ADM and this will continue.
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Where our products are complementary, we will continue to provide.
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But it's important to remember that this is an independent company and that it will run in the best possible way, grow as much as possible, and develop its own activity somewhat independently of its two owners.
00:11:39
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Has a name been decided on?
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Not yet, no.
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Not yet, okay.
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There's a few options which are floated around, but there's not a final decision.
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We hope to have this done when we get the actual closing of the deal, which would be either right at the end of this year or at the beginning of the next.
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Switching gears a bit, obviously sustainability has been an extremely hot topic for the last few years.
Sustainability Initiatives and Lifecycle Assessment Data
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How is ADM addressing customer demand for sustainability credentials in their feed ingredients?
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And how will that carbon footprint data perhaps become a standard specification for ADM products?
00:12:22
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Of course, because we think it's important our customers have access to the lifecycle assessment data for all our feed ingredients.
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At the same time, it's very important to us that this data is provided in a transparent manner and that the data is science-based.
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And so that is why we're a member of the Global Feed LCA Institute.
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They are leading the charge in providing standardized environmental impact data.
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And so this guarantees for us the quality and the reliability, both of the data that we put in, but also that other companies in the industry are providing to that group.
00:13:06
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We provide the data and we encourage anyone who is interested to participate in this, access the data that we provide and also provide their own into the GFLI.
00:13:19
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Mm-hmm.
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Does ADM have a roadmap for expanding its environmental impact measurements across the feed additive portfolio?
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And if so, what does that look like?
00:13:30
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Depends a little bit how you look at it, but again, I come back to my three pillars at the start.
00:13:36
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We have tried to differentiate them and make them very distinctive with performance, the robustness and the environment.
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But it's quite clear that in reality, they are very linked one with the other.
00:13:50
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And if you're so inclined, you could look at it and say, ultimately, everything is linked to the environmental impact, because if your performance is better, then you are consuming less raw materials pound for pound of animal protein that is produced.
00:14:09
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And in the same way, if your animals are more robust, then they're going to mature faster or at least as fast as is possible.
00:14:18
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And again, you are actually reducing the intensity of what you consume in order to produce the animal protein.
00:14:26
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So I think by working on these three pillars, we are overall working on reducing the environmental impact of animal production.
00:14:36
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We're also, like I mentioned before, providing data specifically on the feed additives with the LCA.
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We are participating also with IFIF in an initiative which is called the Road to 2050, and it's trying to shape overall animal feed and sustainable livestock transformation.
00:14:58
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And I think this is going to be a very interesting conversation because as big as ADM is, we are still only one part
Goals for 2026: Performance, Robustness, and Environmental Impact
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of the overall animal production value chain.
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And it's important that the different players in the chain continue to exchange information and optimize across the chain rather than just in the area that they operate in.
00:15:23
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So if we connect again in December of 2026,
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What would you hope to report as ADM's most significant achievement?
00:15:33
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I can't really make comment on specific project, first of all, because it may or may not work.
00:15:39
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Although we always hope when we start that we'll get to the end.
00:15:43
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Some of them are somewhat confidential, but I would say that we've identified significant improvement that can be made across our three pillars.
00:15:54
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On the performance side, we will be working on some topics which are, it's a little bit to say they're old topics.
00:16:02
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There's still work to do on them, but we've been trying to optimize for a long time feed conversion ratio,
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or trying to mitigate the mycotoxin impact on feed.
00:16:14
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So these are not really groundbreaking, but I think they're important to continue
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to make progress on this front.
00:16:22
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And then afterwards, what we see in the different areas that are causing issues for animal production, we see a relatively high incidence of heat stress.
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So that is something that we're working on.
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And then we also have the emergence of some diseases.
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I'm thinking in particular, respiratory diseases in swine.
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because we have new and more virulent strains.
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So that is something that has emerged in the last 12, 24 months, and which we're working on and hope to bring some solutions in 2026.
00:16:57
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And then finally, like we mentioned before, continuing to try and reduce the environmental impact of animal protein production.
00:17:06
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And then the last piece, because we touched on it a little bit earlier, we're rolling out some of our Synchro services.
00:17:13
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Right now, we have this available in some countries in Europe, in particular in France and in Spain.
00:17:21
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And we're working in Indonesia, Mexico, but I'm hoping to add a few to the list.
00:17:28
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Very good.
00:17:29
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Well, thank you so much, Pierre Joseph.
00:17:32
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If you would like more information about what's happening at ADM Animal Nutrition, please visit their site.
00:17:39
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Thanks for tuning in.