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Feed industry’s future depends on responsible production
10 Plays3 years ago
Agrifirm CEO Dick Hordijk discusses the importance of a responsible food chain, efforts to reduce deforestation and emissions, and how the industry is coping with fallout from the war in Ukraine.
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Transcript
Introduction to the Feed Strategy Podcast
00:00:06
Speaker
Hello and welcome to the Feed Strategy Podcast.
00:00:08
Speaker
I'm your host, Feed Strategy Senior Reporter, Anne Roos.
AgriFirm's Production Achievements
00:00:12
Speaker
Dick Hordyke is CEO of AgriFirm, one of Europe's largest animal feed producers.
00:00:16
Speaker
According to Feed Strategy's top feed companies database, Netherlands-based AgriFirm produced more than 5.2 million metric tons of feed in 2021.
00:00:25
Speaker
Hordyke recently joined me to talk about a wide range of topics facing the industry today, from deforestation to circularity in feed to challenges caused by the war in Ukraine.
00:00:34
Speaker
Here's our conversation.
00:00:36
Speaker
Hi Dick, thanks for being here.
00:00:38
Speaker
Hi and welcome.
Sustainability Goals of AgriFirm
00:00:39
Speaker
Agri-Firm's vision is to contribute to a responsible food chain for future generations.
00:00:44
Speaker
Can you tell me about any new sustainability initiatives the company is working on?
00:00:47
Speaker
Yeah, I think I'm still very, very happy with that definition of responsible food chain.
00:00:53
Speaker
It basically means we look at the earth, the impact that our food chain has on our nature.
00:00:59
Speaker
And, of course, on animal welfare but also, for example, we look at the income of our farmers, because, in the end of the day, if the income is in the too much pressure is also not responsible.
Ensuring Deforestation-Free Soy
00:01:09
Speaker
So very concrete recently we worked on the deforestation free soy so guaranteed coming from an area where there's no deforestation and we are running a pilot the fish on campina with lots of positive input.
Fit for Feed Program
00:01:23
Speaker
We started a fit for feet program basically we look at the ingredients that animals are eating and we ask ourselves the question is this ingredient also fit for human consumption.
00:01:35
Speaker
And if the answer is yes, we say you know that means competition between feet and food and we are not sure over the coming years if that keeps going.
00:01:45
Speaker
well.
00:01:46
Speaker
So if there is more pressure on your supplies, will there be more pressure on ingredients being available for feed if they also can be fed to our children?
00:01:55
Speaker
So in our Fit for Feed program, we basically measure the content of our feed solutions.
00:02:00
Speaker
And if the percentage fit for food is too high, we start to work to bring it down.
00:02:04
Speaker
A very inspiring, I would say, road that we have started there.
Short Chain Sales Strategy
00:02:09
Speaker
And the third example is short chain initiatives.
00:02:12
Speaker
We realize if the farmer sells directly to the consumer, a significant part of the margin stays with the customer or with the farmer, I should say.
00:02:22
Speaker
And we love to investigate if there's a role for AgriFirm to play in such initiatives.
Emissions Reduction Initiatives
00:02:26
Speaker
Agriculture is often blamed for a large portion of the world's greenhouse gas emissions.
00:02:31
Speaker
What are some things AgriFirm is doing that reduce emissions from agriculture?
00:02:35
Speaker
Well, I think, first of all, let me state that we admit that there is a challenge.
00:02:39
Speaker
So I think it is not so useful to say that everything is honky dory the way it's organized today.
00:02:45
Speaker
So, and at the same time, we realize it is not something that we can change overnight.
00:02:50
Speaker
And again, very often, what you see is if you don't take the right solutions, there will be tremendous pressure on farmers income.
00:02:57
Speaker
And as a result, there will be resistance.
00:03:00
Speaker
So we are looking for those solutions that include the technical answer, but also the financial economical answer.
00:03:08
Speaker
A nice example is our Bovard pilot.
00:03:10
Speaker
That is the stuff developed by DSM, as I'm sure you are aware.
00:03:14
Speaker
We are running a big pilot together again with Fisant Campina, just making sure that indeed the effect is what it should be.
00:03:22
Speaker
We see the income of the farmer improving because the footprint is lower and Fisant pays a better price when your footprint is below the standard.
00:03:30
Speaker
Frans de Ruitero- And we also investing quite some money in regenerative agriculture, a very modern world those days, as you know, many people are looking at it, and we try to understand okay so can you have more.
00:03:43
Speaker
Frans de Ruitero- Carbon captured in the soil, for example, not blowing or by applying other techniques that we have done in the past.
Impact of Ukraine War on Grain Prices
00:03:53
Speaker
And finally, we are looking at our specialties, our additives.
00:03:57
Speaker
Can we develop solutions ourselves when we basically have lower greenhouse gas emissions coming from the animals?
00:04:04
Speaker
I know your company is involved in research and innovation in several areas.
00:04:08
Speaker
Are there any new projects or innovations you're particularly excited about?
00:04:12
Speaker
I think I mentioned already a couple of them.
00:04:15
Speaker
So what we have decided is we really like to focus our research.
00:04:20
Speaker
So we don't want to try 25 things and hope two will work.
00:04:23
Speaker
We try to do an interesting, sharp selection.
00:04:26
Speaker
And basically in those we say, okay, this is how we should basically make the difference.
00:04:32
Speaker
I think if you look at our additives range, we are focusing on animal health, but also, for example, on better growth, there's a better feed conversion.
00:04:42
Speaker
Because efficiency always will remain very important.
00:04:45
Speaker
So besides the stuff that I just mentioned there, so the deforestation-free stuff, the work that we are doing on reducing emissions, we are also still looking at, okay, is there ways to have better feed conversion?
00:05:00
Speaker
And you can imagine if you are sharpening your definition of what is an acceptable raw material for feed,
00:05:07
Speaker
your feed quality might get some pressure.
00:05:10
Speaker
You still want to have the same quality of growth and health at the farm.
00:05:14
Speaker
And you have to look at smart additives that take care of the animal's health, for example, from a stomach perspective or something like that.
00:05:23
Speaker
So we try to have focus on those topics and bring them together in our research programs.
00:05:28
Speaker
Can you talk about some of the current challenges your company and your clients are experiencing as a result of the war in Ukraine?
00:05:34
Speaker
Yeah, I think what I found an interesting topic, there are many, many examples of direct impact, as you know.
00:05:39
Speaker
And I mean, there is the high gas price resulting, of course, in the high cost of the different ingredients that they are using in the farm and on the field.
00:05:49
Speaker
If you look at the results of the war in the area of availability of grain, the cost of the raw materials, there is a lot of direct impact on the food chain across Europe.
00:06:03
Speaker
The one example I like to point out is Africa.
00:06:06
Speaker
We are dealing with large local players in a range of countries across Africa and the Middle East.
00:06:13
Speaker
And what we noticed is that the grain prices went up significantly as a result of the war in the Ukraine.
00:06:19
Speaker
And there, of course, the impact is even more direct and heavy on the population than we have here in Europe.
00:06:25
Speaker
The result was that basically it was no longer economically viable to feed the grain to the chicken.
00:06:33
Speaker
So there was a tremendous pressure on the chicken industry in Africa.
00:06:38
Speaker
And as Agri-Firm, we realized, you know, but this makes sense.
00:06:41
Speaker
So if this grain is fit for human consumption, we should not find ways to feed them to chicken.
00:06:47
Speaker
We should accept that there is a temporary dip.
00:06:50
Speaker
And of course, you want to keep those chicken farmers in business.
00:06:56
Speaker
So of course, we do all we can with them to sort out the alternatives or to skip
00:07:02
Speaker
Simon Ruetz- cycle and then restart again, but yeah we do understand that over time, this might be one of those signals, maybe say the competition between feed and food.
00:07:11
Speaker
Simon Ruetz- cannot be solved by keep on increasing the price that we pay for our feeding ingredients, we have to look at alternative ingredients
Challenges for European Ag Producers
00:07:19
Speaker
to feed those animals.
00:07:19
Speaker
Anne Schindler, yeah and you mentioned the some of those challenges high feed costs energy costs supply chain issues feed ingredient availability, how are ag producers across Europe coping with those issues.
00:07:31
Speaker
Well, I think that remarkably, to a large extent, people have been dealing with it by getting better prices for their goods.
00:07:41
Speaker
So if you look at the price of milk, for example, everybody noticed it's remarkable how that increased.
00:07:47
Speaker
So in the end of the day, in the remainder of the chain, the retailers, food producers, et cetera, there wasn't understanding that the better price had to be paid to keep the business of the farmer healthy.
00:07:58
Speaker
I think you saw that to a certain extent in other areas as well, like in layers and broilers.
00:08:05
Speaker
I think in pigs, I saw a varying combination of feed prices being high and prices of the pig itself not developing in the right direction for the farmer.
00:08:15
Speaker
So that would be the examples where I say, well, I'm not sure if we are able to cope with those new expense levels.
00:08:21
Speaker
And if this continues to last for a while, and at the moment the feeling is it might take a while before we go back to a really normal situation again, you might see quite some pressure on that specific segment across Europe.
Focus on Circularity in Feed
00:08:34
Speaker
And what are some other trends that you expect to see in the animal feed industry in 2023?
00:08:38
Speaker
I think there's a lot of attention on the agenda of circularity and I really like that.
00:08:44
Speaker
I think circularity, of course, has always been important in big parts of the animal feed industry, right?
00:08:52
Speaker
So we are using our byproducts either in the wet or in the dry form.
00:08:57
Speaker
And I do believe there will be more demand in that area again because it doesn't compete with food, it is something that is not fit for human consumption, but it contains great nutritional value.
00:09:10
Speaker
And I think our legislation systems are not always supporting us in the best possible way, and I see that as getting more attention here in Holland, but also on a European level.
00:09:20
Speaker
So what I hope is that we get better regulation in terms of allowing more feed stuff to be used in a circular way for feeding our animals.
00:09:31
Speaker
Because that is, I strongly believe, the future of animal breeding here in Europe.
00:09:36
Speaker
That we still, you know, we will eat a portion of meat, not all of us, but a large portion of us will eat meat.
00:09:41
Speaker
We might eat slightly less meat than we did a few years ago.
00:09:44
Speaker
But you will need a food chain that basically finds the best way to feed those animals.
00:09:50
Speaker
in a healthy way for the animal, but also of course for the farm.
00:09:53
Speaker
And there I really see a circularity getting more and more attention.
00:09:57
Speaker
And that is right, because I believe that really is the future proof solution that we see more and more across all species.
Closing Remarks
00:10:04
Speaker
Well, we'll be watching those issues and reporting on them along with you.
00:10:08
Speaker
So just want to say thank you for taking the time today to be here on the podcast.
00:10:13
Speaker
Okay, you're welcome.
00:10:14
Speaker
Thank you.
00:10:15
Speaker
And thank you to the audience for tuning in.
00:10:17
Speaker
I'm Anne Roos for Feed Strategy.