Animal Food Production in the US Industry Market Research Report Now Updated by IBISWorld

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From cattle to cats, the Animal Food Production industry provides sustenance for livestock and pets in the US and around the world. Since 2007, spikes in feed prices, increasing demand from farm supplies wholesalers and steady growth in pet ownership have boosted industry revenue at an annualized rate of 3.8%. During the next five years, growth in global meat consumption will increase herd stocks, especially poultry, cattle and swine. Booming livestock numbers will aid the Animal Food Production industry, as global meat demand increases feed demand. The economic rise of developing countries has led to greater appetites for meat in those regions.

IBISWorld Market Research

IBISWorld Market Research

Export growth from greater meat consumption, a rise in pet ownership drive demand.

From cattle to cats, the Animal Food Production industry provides sustenance for livestock and pets in the US and around the world. Since 2007, spikes in feed prices, increasing demand from farm supplies wholesalers and steady growth in pet ownership have boosted industry revenue at an annualized rate of 3.8%. However, according to IBISWorld industry analyst Josh McBee, "the industry's future prospects are modest, with slow but sustained growth anticipated through the next five years. Advancements in crop technology and alternative energy sources combined with product innovation are projected to alleviate some of the inherent risks associated with commodity-based goods. Also, a forecast increase in disposable incomes and, subsequently, pet ownership will likely drive demand for pet food, a segment typified by high profit margins and brand-loyal consumers. Export growth is also anticipated during the next five years, as the economic rise of countries in the Asian Pacific and Latin America drive demand for meat and animal feed."

Given the grain-based nature of most types of feed, movements in agricultural inputs like corn, soybeans and wheat heavily influence profit for animal food producers. Likewise, feed demand stems from the agricultural viability of livestock commodities like beef, pork and poultry. Feed prices, downstream demand for animal products and commodity movements are the key drivers of the industry's fortunes. Demand for pet foods augments total sales. With regard to commodities, corn's relationship to oil has seen increasing feed prices, but recent spikes in the crop's value have been to the detriment of feed producers. Meanwhile, growth in global meat consumption and, consequently, herd stocks has sustained modest revenue gains as meat producers demand more livestock feed. Also, Americans have stood by their pets during the Great Recession, with canine and feline ownership growing even as personal disposable incomes have fallen.

According to McBee, "the Animal Food Production industry has a medium level of company concentration, with the industry's top four players expected to account for about 68% of total market share in 2012. The industry has experienced an increasing level of concentration over the past five years as major companies actively invest in new operations to further strengthen scale economies." Further, the rapidly growing and high-margin pet-food segment has encouraged many producers to switch their production lines from livestock feed to these products. Industry consolidation is expected to continue in the future through sustained merger and acquisition activity, primarily driven by major players such as Cargill, ADM and Mars. Given that economies of scale are imperative to maintaining industry profitability, it is very likely there will be fewer animal food manufacturers servicing wider geographic markets over the next five years.

For more information visit IBISWorld’s Animal Food Production in the US industry page

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IBISWorld industry Report Key Topics

Firms in this industry process raw ingredients into food for animal livestock and pets. The products are packaged and sold to cattle ranches, dairy farms, other animal-production farms, grocery wholesalers and retailers.

Industry Performance

Executive Summary

Key External Drivers

Current Performance

Industry Outlook

Industry Life Cycle

Products & Markets

Supply Chain

Products & Services

Major Markets

Globalization & Trade

Business Locations

Competitive Landscape

Market Share Concentration

Key Success Factors

Cost Structure Benchmarks

Barriers to Entry

Major Companies

Operating Conditions

Capital Intensity

Key Statistics

Industry Data

Annual Change

Key Ratios

About IBISWorld Inc.

Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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