In order to improve the efficiency of feed production and reduce costs, listed and group companies should focus more on the utilization of small raw materials, main ingredients, and quality control. Some raw material suppliers could process their own materials, which is an effective technical approach to managing formula costs, especially in a scenario where feed ingredient prices are high. For example, with soybean priced at 4,700 yuan per ton, soybean oil at 8,500 yuan per ton, and soybean meal at 4,200 yuan per ton, there is no clear economic benefit in using soybean meal combined with soybean oil instead of directly using whole soybeans. In extruded feed, soybeans can be crushed into 80-mesh particles, extruded, and used without any issues related to anti-nutritional factors. Since farmed fish do not suffer from these factors, soybeans can be directly incorporated into extruded feed as a raw material.
This year, fishmeal prices have surged dramatically. To counter this, feed formulations should increase the use of meat powder, blood cell powder, and oils. Domestic meat powder can be processed by feed companies themselves, using simple equipment and procedures. Self-processed meat powder can be turned into high-quality protein sources, whereas commercially available meat powder is often second-pressed or high-temperature processed, leading to lower protein utilization and higher oxidation risks.
With oil prices relatively low this year, increasing the amount of oil in feed is both practical and cost-effective. Oils like rapeseed, sunflower, meat, duck, and chicken oils are more accessible than protein sources. This strategy is crucial for mitigating the impact of high fishmeal prices. The direct consequences of the rising fishmeal prices include the gradual loss of high-end exports like Peruvian and Chilean fishmeal from the Chinese market, with domestic fishmeal becoming more dominant. As a result, domestic fishmeal producers are shifting toward better processing techniques and quality control, aiming to develop high-end fishmeal products. More importantly, this situation presents a significant opportunity to enhance fishmeal quality and stabilize the domestic market.
The key takeaway is that China consumes over 50% of the world’s fishmeal, and a large portion of it is used in aquafeeds. Therefore, China holds considerable influence over the pricing of fishmeal and other major animal-based raw materials. Controlling the production and usage of high-end fishmeal is a priority for listed companies, not just small and medium-sized feed enterprises. Relying on high feed sales prices is a short-sighted strategy that doesn’t benefit either the companies or the farmers. Instead, listed companies should expand into the production of primary feed ingredients and take control of the pricing mechanism, thereby reducing feed costs and boosting profits. Additionally, this approach allows them to gain stronger influence in international markets.
In terms of feed formulation, sticking to traditional patterns such as relying heavily on fishmeal and soybean meal may become challenging this year. The pricing power of soybean meal is not entirely under our control, as U.S. markets and futures trading often manipulate its price through speculation. This has led to situations where the combined price of soybean meal and soybean oil exceeds the price of whole soybeans. High soybean meal usage also poses challenges, as excessive amounts can negatively affect feed performance and even damage intestinal health in aquatic animals. Soybean peptides bind to bile acids, which are essential for digestion. While this is beneficial in human nutrition, it can be harmful to aquatic species, potentially damaging the intestines. Therefore, reducing soybean meal usage is necessary, and research into alternative formulations for shrimp and marine fish is urgently needed.
Understanding how the market price of farmed fish is determined involves analyzing three main pricing mechanisms: feed ingredient pricing, feed product pricing, and farmed fish product pricing. These mechanisms are influenced by capital markets and foreign pricing powers, rather than purely by supply and demand. As a result, feed companies often pay inflated prices for raw materials, which are then passed on to consumers. Farmers, in turn, face losses despite selling fish at low prices. To address this, feed companies should provide farmers with accurate information and guide them in optimizing aquaculture practices.
For instance, grass carp is the most widely farmed fish in China. Ensuring consistent monthly supply and maintaining profitability requires strategic planning. If all farmers concentrate on selling fish at the same time, prices drop, and profits decline. By guiding farmers to stagger their harvests, feed companies can help maintain stable prices and better returns. Learning from Guangdong’s model, where grass carp is sold every month and new species are introduced regularly, could offer a solution. Establishing cooperatives, managing fry timing, and leveraging regional differences in breeding cycles can ensure continuous supply and maximize efficiency.
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