Medicated Feed Market Analysis

Medicated Feed Market (Global, 2023)

Introduction

A growing number of people are becoming interested in the animal health and welfare issues of livestock and poultry, as a result of the increased demand for high-quality animal products and the growing concern for the animal health and welfare. Medicated feeds are used to prevent and control diseases, and to increase the performance of the livestock. The products on this market are very varied and include a wide range of antibiotics, probiotics and other therapeutics, which are formulated to meet the specific health needs of different species. The regulatory framework for medicated feeds is also changing, with a greater focus on food safety and the responsible use of antimicrobials. As a result, manufacturers are having to change their products and their formulations. As consumers become more demanding for safe and healthy food, the medicated feed market will play a major role in shaping the future of animal husbandry and food production.

PESTLE Analysis

Political

In 2023, the market for medicated feed was heavily influenced by government regulations designed to ensure food safety and the health of livestock. The U.S. Food and Drug Administration had instituted the Veterinary Feed Directive, which required that certain drugs be used in animal feed only under the supervision of a veterinarian. This directive affected approximately 70% of medicated feeds in the U.S., since it required the authorization of nearly 10,000 veterinarians. On top of this, trade policies and tariffs affected the import and export of medicated feedstuffs. The U.S. imposed tariffs on certain feed additives from certain countries, which accounted for about $200 million in imports annually.

Economic

The market for medicated feed is also influenced by economic factors such as the price of the raw materials and the state of the economy in general. The price of the raw materials for animal feeds, corn and soya-bean meal, fluctuated in 2023. The average price of corn was ten kroner, a fifteen per cent increase over the previous year. This rise in the cost of the feeds may lead to a rise in the prices of the medicated feeds, and the profit of the farmers is affected. In addition, the demand for meat and dairy products is increasing; according to FAO estimates, meat consumption will rise by one million tons in 2023. This will in turn increase the demand for medicated feeds.

Social

The veterinary feed industry is increasingly being influenced by consumers’ concerns about animal welfare and food safety. Surveys show that in 2023 about two-thirds of consumers are concerned about the use of antimicrobials in livestock production. This has led to an increased demand for feeds without antibiotics and organic feeds. This change in consumer preference has forced manufacturers to develop new veterinary feeds that are in line with these values. Also, the rise of social media has heightened the public’s awareness of food production and animal welfare. Almost half of consumers are more likely to buy from companies that communicate their animal husbandry practices transparently.

Technological

In the development of the market for medicated feed, the role of technological progress is particularly important, in particular the development of the precision feed and feed additives. In 2023, smart farming will have spread to approximately 30 percent of livestock farmers, who will be using data analysis to optimize feed efficiency and animal health. Probiotics and prebiotics are also becoming increasingly popular. The world market for feed additives will reach 25 billion dollars by 2023. These new developments not only improve animal health but also help to reduce the use of conventional antibiotics in feed.

Legal

The legal situation relating to the use of medicines in animal feed is characterized by strict regulations aimed at preventing the use of medicines in animals. In 2023, the European Union imposed a ban on the use of some antibiotics in animal feed, affecting about 40 percent of the region's animal feed market. These regulations impose on manufacturers the obligation to invest in research and development in order to develop alternative solutions, which can cost up to one million dollars for small and medium-sized businesses. In addition, the issue of labeling and advertising is becoming more and more disputed, and in the last year alone, over 200 lawsuits have been filed against misleading claims on the use of medicines in animal products.

Environmental

Environmental considerations are increasingly influencing the development of the medicated feed market, in particular in relation to the contribution of livestock farming to the production of greenhouse gases. In 2023, livestock farming will account for approximately 14.5 per cent of the world's greenhouse gas emissions, which will lead to calls for more sustainable practices in the industry. In this respect, the use of medicated feeds that promote animal growth can contribute to reducing the environmental footprint of livestock farming. In addition, new regulations aimed at reducing nutrient run-off from animal waste are being introduced, and the EPA has estimated that compliance costs for livestock farms could amount to as much as $500 million per year. This is leading to a push for more sustainable feed formulations that minimize waste and promote sustainable farming practices.

Porter's Five Forces

Threat of New Entrants

The Barriers to Entry in the Medicated Feeds Market are Moderate, due to the Regulatory requirements and the need for specialized knowledge of animal health and nutrition. However, new entrants can find opportunities by focusing on niche segments or by developing new products.

Bargaining Power of Suppliers

The market for dietary feeds generally has low bargaining power because there are so many suppliers of raw materials and feed additives. The availability of alternative sources and the ease with which manufacturers can switch suppliers also help to make the position of buyers more favourable.

Bargaining Power of Buyers

The buyers in the veterinary feed market, including large-scale livestock producers and feed manufacturers, have great bargaining power. They can influence the price and demand a higher quality of feed because they have a choice of suppliers and because the quality of feed is so important to the health and productivity of livestock.

Threat of Substitutes

The threat of substitutes in the medicated feed market is moderate, as there are alternative feeding strategies and non-medicated feeds. However, the specific health benefits provided by medicated feeds for prevention and treatment create a certain degree of dependence among certain market segments.

Competitive Rivalry

Competition in the Medicated Feed Market is intense. There are many players fighting for a share of the market. Product performance, price, and brand reputation are all factors that companies compete on. This leads to aggressive marketing strategies and continuous innovation to differentiate their products.

SWOT Analysis

Strengths

• Growing awareness of animal health and welfare among livestock producers.
• Regulatory support for medicated feed to prevent disease outbreaks.
• Established distribution channels and strong relationships with veterinarians and farmers.

Weaknesses

• High production costs associated with medicated feed formulations.
• Potential resistance development in animals due to overuse of antibiotics.
• Limited consumer acceptance of medicated products in organic and natural markets.

Opportunities

• Increasing demand for sustainable and organic livestock products.
• Advancements in feed technology and formulation for better efficacy.
• Expansion into emerging markets with growing livestock industries.

Threats

• Stringent regulations and potential bans on certain medicated feed ingredients.
• Rising competition from alternative feed solutions and natural supplements.
• Economic fluctuations affecting livestock production and feed purchasing power.

Summary

The Medicated Feed Market in 2023 will be characterized by a high awareness of animal health, supported by regulatory frameworks, but will face challenges such as high production costs and resistance from consumers. Opportunities will be found in the growing demand for sustainable products and technological advances, while threats will come from regulatory pressures and competition from alternative solutions. Strategic focus on innovation and market expansion will enhance growth in this industry.