WASHINGTON, D.C., ARLINGTON, VA. and ALEXANDRIA, VA. — In a first-of-its kind, comprehensive study of the United States’ pet food ingredient and production landscape, the American Feed Industry Association’s (AFIA) Institute for Feed Education and Research (IFEEDER), Pet Food Institute (PFI) and the North American Renderers Association (NARA) have quantified several of the positive impacts the pet food and treat industry has on the overall agricultural economy.
“The US pet food market is significant. We had national sales of over $30 billion in 2019. In fact, two-thirds of US households have a pet, and so I think we can conclude there’s a lot of bowls that need to be filled. Yet, surprisingly, we have not had a study that examined the purchasing power of this industry and how it supports our agricultural economy,” said Constance Cullman, president of AFIA and IFEEDER, during a webinar on March 12.
Over a one-year period, the organizations sought to quantify and categorize the number of ingredients most commonly used in US pet food products and determine their upstream value for farmers and suppliers.
“Upstream volume and sales refers to the purchases pet manufacturers make of ingredients and other supplies that make it possible for them to manufacture high-quality dog and cat foods, which then stimulates the economy in other industries,” Cullman said.
The Pet Food Production and Ingredient Analysis study leveraged pet food and treat sales data from Nielsen collected between June 1, 2018 and May 30, 2019, as well as other original and external sources to provide this comprehensive report.
In total, there are 519 US Food and Drug Administration-certified pet food facilities in the US, with the largest number in Pennsylvania (83). These facilities purchased more than 8 billion tons of pet food ingredients at a value of $6.9 billion, including commodity crops such as whole grains and corn, meat and poultry products, rendering animal proteins and fishery products.
"We need to know the volumes, values and trends in pet food to better prepare for the future,” said David Meeker, Ph.D., senior vice president of scientific and regulatory affairs for NARA.
Volumes and values are separated by state, dog food, cat food, dry food, wet food and treats, as well as by ingredient category, in the full report.
“We had 1,200 specific ingredients that were then grouped into 359 ingredient categories, and the categories were grouped into seven subcategories, and then within the subcategories we also had groups,” said David Meeker, Ph.D., senior vice president of scientific and regulatory affairs for NARA.
These seven subcategories include farm and mill-based ingredients, meat and poultry products, rendered protein meals, water, fishery products, broths and gravies, and minerals and other additives. The study did not include microminerals or other additives such as preservatives, colorings or palatants, Meeker said.
By noting purchasing and label information gathered through Nielsen, the organizations broke down each pet food formula through a process they call “recipe reverse engineering” to estimate the volume of each raw ingredient, as well as their values based on average prices provided by government agencies and private reporting services.
“Doing this, we were able to provide expert analysis on these economic values to other industries. For example, corn growers may not realize the importance of pet food to their markets, and even my own industry, rendering. We need to know the volumes, values and trends in pet food to better prepare for the future,” Meeker said.
This tedious categorization can be used to help farmers understand the current market and demand for certain ingredients to be grown for and incorporated in pet food products.
Dana Brooks, president and chief executive officer of Pet Food Institute, added that the purchase of pet food ingredients has a trickle-down effect to other related industries.
“Research finds that the exchange of pet food ingredients leads to the purchase of [an] additional $5.3 billion of materials and services for farmers and farm suppliers. This includes inputs such as seed, fertilizer, fuel, machinery and labor. In addition, farm suppliers buy $4.1 billion in materials and services,” which they then provide for farmers, she said.
The study also found that the use of leftover ingredients from other industries, such as commercial baking and brewing, as well as animal by-products from the rendering industry, make the pet food ingredient supply chain more sustainable.
Another key takeaway is a state-by-state analysis of pet food consumption, production and ingredient production. By no surprise, the most populous states — California, Texas and Florida — have the highest pet ownership and, therefore, pet food consumption rates in the nation.
Additionally, state revenues from pet food ingredient sales are highest in five states: Missouri, Kansas, Pennsylvania, Iowa, Ohio. Missouri led this category with nearly $1 billion in pet food ingredient purchases, followed by Kansas with $574 million, Pennsylvania with $571 million, Iowa with $422 million, and Ohio with $367 million, Brooks said.
Rob Cooper, executive director of IFEEDER, noted that the study will likely be repeated or updated every five years.
“We recognize that this industry is dynamic, formulations change, and that there are a range of factors that could include the need to update this data,” Cooper said.
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