On May 10, the U.S. government increased the tariff rates on $250 billion of Chinese exports to 25% from 10%. Given the US president, Donald Trump’s unpredictable nature, the chances of trade-tensions further escalating are high. While no industry is insulated from the trade war, the Animal Nutrition/ Feed industry has not been majorly impacted.     

India’s role and impact on USA’s Feed Industry  

India emerges on top among the countries that could fill the deficit left by the trade war. The subcontinent has always been a tough competitor to China for several feed ingredients used in the Animal Feed/ Nutrition industry. Various ingredients such as Inorganic and Organic Trace Minerals have always been and continue to be produced in India at cheaper prices as compared to in China.

The US Government’s recent decision to remove India from the Generalized System of Preferences will have no impact on the US Animal Feed Industry as none of the products associated with the industry fall within the GSP’s purview.

Impact on China’s Animal Feed Industry   

China, which buys approximately two-thirds of globally traded soybeans to help feed its huge livestock herd, has been severely affected by the trade war. The US has been China’s second largest supplier of beans. The country has been exploring multiple avenues to reduce its consumption of feed ingredient soymeal, made from soybeans. China has also been turning to alternative meals and reducing protein levels in feed.

China’s Feed Industry Association recently approved new standards for feed for pigs and chickens, lowering the protein levels in pig feed by 1.5 percent and those for chickens by one percent.

The country has also been turning to Brazil as its primary trading partner for soyabean.

India’s favorable trade policies, competitive pricing and quality assurance makes the country the primary alternative for the USA to source animal feed ingredients.