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China Feed Industry Overview

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Major consumer groups of feed include retailers, individuals and companies. The number of companies with certain scale is relatively small due to the low concentration rate of the livestock breeding industry and extensive geographical locations. The urbanization is low while the rural population proportion is large in China so there are numerous small raising households, which leads to certain demand for feed. The demand of retailers for feed is larger because of their small-scale breeding with mature technologies and fund basis. Some breeding companies are key feed consumers with large scale and variety as well as long-term orders with suppliers. Therefore, the development of the livestock breeding industry is closely related to that of the feed industry. 

Major downstream of the feed industry refers to the livestock breeding industry. In recent years, the livestock breeding industry scales up, promoting profits and disease incidence and influencing the cycle of the feed industry. Consumers of feed are large in demand volume but low in the bargaining ability with the scaling up of the livestock breeding industry when no disease happens and vice versa.

According to the output volume of feed increased from 190 million tons in 2011 to 280 million tons in 2015 in China. The market scale of feed increased from CNY 724.94 billon to CNY 1,125.72 billion during the corresponding period. Meanwhile, the size growth rate of the feed market increased from 14.68% in 2011 to 16.35% in 2012 while it declined to 4.10% from 2013 to 2015. Generally, the market size of feed grows while the rate declines, which is related to the slump growth rate of economy in China.

According to the aggregate market concentration rate of top 5 enterprises in the growing feed industry was about 10% in 2015. The feed industry is at the stage of accelerated integration with the scaling up of downstream breeding enterprises, leading to a structure transformation in terms of the demand, market and products for quality and safety. In reality, small sized enterprises are phased out while large scale ones are expanding so the concentration rate of the feed industry is growing apparently. The restructuring of the feed industry is considered to be major means for enterprises to explore the way out.

Presently, the feed industry develops rapidly with the extending application of concentrated feed, which promotes the pig raising industry. With the development of e-commerce, increasing number of various pig feed products and manufacturers as well as the transition of concentrated feed towards the e-commerce market, numerous consumers and manufacturers choose to rely on animal husbandry business websites to conduct presentation and trading in accordance with their own breeding characteristics.

The feed industry possesses a large market potential with the growing livelihood and demand for livestock products in China. It will be promoted by the scientific and rational livestock breeding industry with growing scale and production efficiency.



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