Indonesia Animal Feed Market - Forecasts from 2024 to 2029

The Indonesian animal feed market is projected to rise at a compound annual growth rate (CAGR) of 5.38% to reach a market valuation of US$13.726 billion by 2029, from US$9.508 billion in 2022.

The growing demand for poultry in Indonesia is a key driver for the animal feed market in the country. Poultry, particularly chicken, is a staple protein source in the Indonesian diet and is widely consumed across the nation. As the population grows and incomes rise, there is an increasing demand for poultry products, including meat and eggs. This rise in demand for poultry necessitates higher production levels, which in turn requires a significant quantity of animal feed to support the growth and development of poultry livestock. Consequently, the increasing demand for poultry drives the need for more animal feed production, stimulating growth in the animal feed market in Indonesia. Additionally, advancements in animal nutrition and feed technology further contribute to the animal feed market expansion to meet the evolving needs of the poultry industry.

A report released in April 2020 indicated that the poultry industry in Indonesia consumes approximately 86% of the country's domestic animal feed supplies. Aquaculture utilizes 8% of these supplies, while the remaining 6% is allocated to cattle and swine.

Furthermore, the increase in per capita income is contributing to the rising demand for animal feed, particularly among affluent consumers who are willing to pay premium prices for high-quality meat products produced from animals fed with superior feed. Indonesia's feed mill industry comprises approximately 110 feed mills operated by 44 companies across 10 provinces. According to a USDA report, the total installed capacity of these mills reached 29.7 million metric tons (MMT) in 2020, with operations running at 70-75% of this capacity. Additionally, the broiler population is projected to increase by 8.5% between 2020 and 2024. In 2021, feed mills manufactured around 19.24 million metric tons of poultry complete feed, while poultry farmers produced 1.26 MMT of home-mixed feed, according to data from the Central Agency on Statistics (BPS).  The escalating demand for animal feed from the poultry sector is expected to propel market growth in Indonesia during the forecast period.

Rising demand for meat is anticipated to boost the market

One of the prime reasons supporting the market growth is the rising meat demand in Indonesia. Over the past few years, meat consumption has grown strongly. Per person consumption in Indonesia increased markedly with small increases in income over the period [Department of Agriculture, Water and the Environment]. Thus, the Indonesian animal feed market is poised for healthy growth during the forecast period. The growing middle-class population in Indonesia is shifting their diets to high-value foods, which have increased their consumption of meat in the past few years. In a report published by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), it was estimated that meat consumption in the country will increase by 1321pc by the end of 2050, which is projected to drive the overall market growth in the coming years.

According to USDA, the consumption of poultry meat has increased to 11.63 kg per capita per year in 2022 in comparison to 2020, when the total consumption was 10.1 kg per capita. Consumption of eggs has also increased from 18.52 per capita in 2021 to 19.32 in 2022. The rising consumption of meat is anticipated to drive the demand for animal feed products in the country.

Additionally, a large shift in the dietary consumption patterns from a carbohydrate-based to a protein-based diet is increasing the meat demand. The shifting of consumption patterns is primarily attributable to growing urbanization, the adoption of a busy lifestyle, the increasing popularity of big modern retail formats, and the presence of multinational food companies in Indonesia, further increasing the popularity of convenience foods. The surge in per-capita income is further adding to the growing demand for imported animal food. The Indonesian GDP per capita has increased from USD 3,870.6 in 2020 to USD 4,291.8 in 2021. (Source: World Bank).

The compound feed market is projected to grow

Compound feed is a mixture of at least two feed materials, regardless of whether it contains feed additives. Indonesia is a leader in the halal food industry, with increasing packaged halal meat, the demand for animal protein is propelling the animal feed market. Indonesia is facing a significant price fluctuation in meat and eggs due to the poor health of chickens in the region.

Further, the ban on the use of Antibiotic Growth Promotors (AGP) in animal feeds is adding to the issue. However, this also serves as an opportunity for several players to invest in the country as more and more farmers and poultry owners are becoming aware of the compound feed without antibiotics to address the health issues of chickens. One such example is the launch of the QMax series by Cargill.

The growing market of Indonesian animal feed market is attracting several companies for their strategic investments. For instance, De Heus Animal Nutrition acquires compound feed operations from Neovia Indonesia. The company acquired two compound feed mills located in West Java and East Java. It is estimated the mills produce a total sales volume of 125,000 tons. The acquisition of Neovia Indonesia by De Heus Animal Nutrition will help the company to get a strategic advantage by investing in the region. As the majority of the population is a meat-eating population in the country. Further, with the rising disposable investment, it is anticipated to increase. This acquisition was done amid the pandemic in June 2020.

The commercial mills segment is projected to grow

The Ministry of Agriculture predicts that between 2020 and 2024, the number of broilers increased by 8.49% per year, reaching 3.4 billion heads in 2021, translating into a forecasted 3.97 MMT of meat production. Feed mills are anticipated to generate 18.7 MMT of poultry feed. Consequently, there will be an increase in commercial mills to meet this growing demand.

As per the same source, around 110 feed mills are operating in Indonesia in 10 provinces, with 81 mills on Java Island in 2022. About 29.6 MMT of installed capacity was operational in 2020-21, up 20% from 24.7 MMT in 2018. Currently, feed mills are operating on average at 70% of their installed capacity. Thirty flour mills yield wheat flour around the Indonesian archipelago. Commercial feed mills keep growing on account of rising disposable income. The installed capacity for the marketing year 2020-21 was estimated at 13.1 MMT, up from the prior prediction of 12.8 MMT. However, compared to 80 percent in 2018-19, running capacity was only averaging 60 to 70 percent in 2020-21.

Further, around one-third of the feed rations prepared by Indonesian feed mills use imported feed components. Soybean meal, flesh and bone meal, distillers’ dry grains, as well as other corn-derived products, are important imported feed additives. However, commercial feed mills are using more local corn as the main energy source in feed due to the skyrocketing prices of wheat, maize, and other imported feed materials, as well as government pressure to consume local supply. According to the Ministry of Agriculture, feed mills purchased 2.8 MMT maize from January to May 2021, up 12% over the 2.5 MMT purchased during 2020.

Large corporations have built feed mills to expand their presence in the animal feed market. For instance, Japfa owns cutting-edge feed mills that have received national and international certifications, including Quality Management System (SMM), Good Manufacturing Practice (GMP), and ISO 9001:2015 certification. They own 14 feed mills that have a team of Technical Service specialists for better commercial results for poultry farmers.

Key Players:

• Kemin is committed to creating products that support farmers in raising wholesome chickens and cattle. Kemin's solutions are supported by a group of professionals and strict quality and safety guidelines to guarantee that its clients get the most out of each product.
• Novus International is a leading producer of animal feed. To create cutting-edge, inventive technology that will assist protein manufacturers in achieving greater outcomes, the company integrates local knowledge with worldwide scientific study. Nippon Soda Co., Ltd. and Mitsui & Co., Ltd. are the private owners of NOVUS. With its global headquarters located in Chesterfield, Missouri, the company provides services to the animal husbandry sector worldwide.
• BASF Animal Nutrition has developed and produced animal feed additives such as organic acids, vitamins, carotenoids, and enzymes. The goal of the company is to supply the feed industry with highly efficient goods and, to assist efficient and sustainable animal protein production with new digital solutions.

Segmentation:

By Type

• Fodder
• Forage
• Compound Feed

By Livestock

• Pork
• Aquatic Animals
• Cattle
• Poultry

By Form

• Liquid
• Dry

By 

Production Systems

• Integrated
• Commercial Mills

By Source

• Organic
• Conventional

By Raw Materials

• Soy
• Corn
• Rendered Meal
• Others