INTERVIEW: Tariffs creating 'climate of uncertainty' in global animal feed markets: American Feed Industry Association

Against a backdrop of rising uncertainty in the animal feed industry caused by trade protectionism in the United States coupled with potential retaliatory measures, Platts talked to Constance Cullman, President and CEO of the American Feed Industry Association, to gain her insights. The AFIA isthe largest trade association dedicated solely to animal food, representing about 70% of US feed manufacturing with 650 members across feed and pet food manufacturers, ingredient and equipment suppliers, pharmaceutical companies, integrators, and renderers.

The following interview is lightly edited for sense and brevity.

Platts: What are some of the current trends in feed grain commoditization that AFIA is observing?

Constance Cullman: The feed grain market is evolving rapidly. We're witnessing a clear shift away from traditional commoditization. Global demand and supply chain dynamics are driving changes that affect both pricing and availability. This trend challenges our members to secure consistent, affordable supplies. In response, we actively monitor market developments and provide insights and practical tools to help them navigate this shifting landscape. Additionally, there's a growing trend in using niche additives, vitamins, and amino acids to enhance nutritional profiles in compound feeds. While these specialized additives improve animal nutrition, they also expose the industry to risks if key inputs come from a single source, emphasizing the importance of diversifying sourcing strategies.

Platts: How has the anticipation of policy changes regarding tariffs and trade agreements impacted the animal feed industry?

CC: We're approaching the issue of tariffs with caution. Tariffs, whether imposed on imports, levied as retaliatory measures on exports, or potentially becoming semi-permanent, create a climate of uncertainty. We engage closely with our members to assess the current impact and predict which products might face the most severe tariffs. The word of the day is "unpredictable"; indeed, it's challenging to forecast policy shifts accurately. Over the past 18 months, AFIA has communicated our concerns to the US government, and we've shared similar messages with our EU counterparts. For instance, vitamins, a critical input, are produced almost exclusively in China (with some production in Germany still linked to Chinese inputs). This reliance on a single source raises important questions about supply chain stability and informs our approach to tariff-related challenges.

Platts: How do trade relationships with blocs such as the European Union influence US animal feed exports as well as the American Feed Industry Association's strategies?

CC: Trade relationships with the EU are essential to our strategy. We work hand in hand with sister organizations like FEFAC in the EU and FEEDLATINA in South America to foster mutual understanding and coordinate on shared challenges. Ideally, we envision a world with clear, predictable, science-based free trade agreements that allow innovators to plan confidently without the risk of being excluded from markets. The EU, with its market-based democratic systems and sophisticated agricultural sector, shares many commonalities with us. We're addressing traditional trade hurdles through coordinated efforts with the US Department of Agriculture and DG Agri [the EU's Directorate-General for Agriculture and Rural Development] focusing on sustainability and supply chain resiliency. Additionally, we're actively strengthening ties with other key markets such as Brazil, Morocco and Vietnam, each offering unique opportunities for bilateral growth.

Platts: How is AFIA addressing policy and regulatory challenges in the animal feed industry?

CC: Policy and regulatory challenges are a constant in our industry, and we tackle them head-on. AFIA engages with policymakers at all levels to advocate for regulations that promote industry growth and sustainability. We work collaboratively with government agencies, industry stakeholders, and other trade associations to develop a regulatory framework that fosters innovation while ensuring compliance. Our proactive approach means that we not only voice our concerns but also provide our members with the necessary guidance to navigate complex regulatory environments, ensuring that the industry remains competitive and forward-thinking.

Platts: What sustainability initiatives is AFIA involved in within the animal feed supply chain?

CC: Sustainability is at the heart of AFIA's efforts. We encourage our members to adopt environmentally friendly practices, such as reducing waste and improving resource efficiency, and actively support research and innovation in sustainable feed production. By collaborating with academic institutions and industry partners, we're developing new technologies and practices that balance the growing demand for animal feed with environmental stewardship. Our goal is to enhance the industry's reputation and secure its long-term viability by ensuring that production processes are both efficient and environmentally responsible.

In a world marked by unpredictable challenges and rapid changes, AFIA's commitment to advocacy, innovation, and sustainability remains a cornerstone in supporting the global animal feed market.