Since the COVID-19 pandemic first hit the largest pet food market, the U.S.,various industry voices have raised concerns about possible pending effects onthe ingredient supply chain. With the bleak news coming out of the U.S. meatindustry these days regarding its supply chain and operation problems, thoseworries seem to have hit a new level. Are they warranted?
Many common protein ingredients used in pet food come directly from the meatand poultry supply chain, such as meals, organ meat and other rendered by-products. So it stands to reason that the plant closures and distributiondisruptions happening in that chain would have an impact on pet food.
Yet experts at industry-related organizations such as the North AmericanRenderers Association (NARA) and American Feed Industry Association (AFIA) saythe pet food supply chain is not being affected significantly to date. At thesame time, we’re hearing – anecdotally and strictly off the record – from petfood manufacturers and ingredient suppliers that they are indeed experiencingingredient shortages. What gives?
The big picture: meat and poultry disruptions
Early on, as cases of COVID-19 began spreading across the U.S., meat demand onthe food service and institutional side of processors’ businesses dropped offa cliff, as restaurants, schools and other large customers closed.Simultaneously, demand on the consumer and retail side, especially in grocerystores, soared, causing at least temporary shortages.
Now, according to large meat processors such as Tyson facing multiple plantclosures, those shortages could become more significant and long term. Tyson,which closed three of its beef and pork processing plants due to COVID-19infections, even took out full-page newspaper ads declaring, “The food supplychain is breaking” and warning that “millions of pounds of meat” are at riskof disappearing from the food chain. (Since then, President Donald Trump hasissued an executive order to keep meat and poultry processing plants running.)
While poultry – a more common ingredient in pet food than beef or pork – seemsto be suffering fewer plant closures, the abrupt changes in demand have been areal problem. “Facilities designed to efficiently produce made-to-orderspecially sized foodservice products on a just-in-time basis can’t turn on adime and bring in different-size birds to produce retail packages of meat andparts,” wrote my colleague Terrence O’Keefe, content director for Watt GlobalMedia. (Note: Watt Global Media is Petfood Industry’s parent company.)
NARA, AFIA: pet food ingredient supply holding up for now
Poultry meal was the first pet food ingredient we heard about being in shortsupply – again, anecdotally and off the record – starting about the second orthird week of April. Since then, we have also heard concerns about otherpoultry proteins, impending shortages of beef and pork-based ingredients dueto that supply chain disruption as well as micro ingredients and possibly evencommodities.
Still, David Meeker, Ph.D., senior vice president of scientific services forNARA, said if closed meat and poultry processing plants are reopened soon, hedoesn’t foresee a huge hit to the supply of co-products (rendered proteins)for pet food. He did acknowledge localized or small-scale shortages forrenderers and said the dramatic shift in demand from foodservice to retail hasaffected the cuts of meat and stream of material available to renderers.“We’re gaining some and we’re losing some,” he said.
In addition, due to the initial spike in pet food sales in the U.S. aspandemic-driven shelter-in-place orders proliferated, there was a resultingrise in demand for rendered products, by as much as 30% in some cases, Meekersaid. “That kind of increase is going to cause some spot shortages, and maybesome increased prices and maybe inability to fill all those orders, but Iexpect normal amounts to be produced without a lot of problems, unless thingsget a lot worse.”
Leah Wilkinson, vice president of public policy and education for AFIA,provided a similar outlook regarding micro ingredients, because the U.S. petfood and livestock feed industries began reacting to COVID-19 while it wasstill mainly in China only, she said, and also learned from the ongoingAfrican swine fever outbreak there that erupted in 2019 and has affected someingredient supplies.
“We know that China is a significant exporter and source of vitamins and aminoacids in particular,” Wilkinson added. “We’ve been able to monitor thesituation and we knew there would be tightening of supply, from when theyclosed and until whenever they opened. The industry jumped on top early tokeep access to those ingredients … Relationships with suppliers around theworld allowed diversifying the supply chain.”
Like Meeker, though, Wilkinson did say that if pandemic-driven disruptionscontinue for a long time, there could potentially be some problems for theingredient supply chain. Meanwhile, she said AFIA and other industry partnershave begun discussions with the Food and Drug Administration about helping petfood manufacturers deal with potential labeling changes due to the possibleneed to substitute ingredients or change their order in formulations.
No public information on specific ingredient shortages
Other regions of the world, including Europe and Southeast Asia, have alsoexperienced disruptions in their agriculture, meat and feed supply chains,which likely are affecting pet food, too. Yet in a global survey of pet foodmanufacturers in our Petfood Industry audience, only 12% identified ingredientshortages or inconsistent supply as their top challenge resulting from theCOVID-19 pandemic.
Of course, even if it’s not their top challenge (for 39% of these pet foodmanufacturers, keeping their employees safe and healthy is), surveyrespondents not selecting that option may still be experiencing ingredientshortages. Among 20 comments provided to that question in the survey, onementioned corn gluten meal, another fresh ingredients from certain providersin Malaysia and one, just supply chain delays in general.
Aside from those comments, it’s difficult to know the specific shortages petfood companies are experiencing or their level of severity because no one willmake that information available publicly. Perhaps brands want to avoidalarming their customers over possible shortages of their pets’ food or areworried about giving competitors an advantage if they acknowledge ingredientshortages.
While we all hope any ingredient shortages are temporary due to the increaseddemand and meat/poultry and other supply disruptions, the continuinguncertainty we all feel about this unprecedented crisis likely only ratchetsup anxiety over current or potential shortfalls. Typically, that type ofanxiety is expressed privately within closed manufacturer-supplierrelationships or among industry contacts – and understandably, not for publicconsumption or discussion.
If you do feel comfortable contributing information about your company’sexperiences with ingredient supplies, please email me [email protected].
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