Fishmeal has shifted from being a bulk commodity traded on price to a strategic ingredient: Rabobank

“We see fishmeal usage now being about what it can bring during the really critical stages of livestock and aquaculture production,”​ Andrew Jackson, technical director at the marine ingredients organization, IFFO, told FeedNavigator.

Fishmeal’s transition from a bulk commodity traded on price to a high quality and high value product has been occurring for some time, with leading fishmeal producers investing heavily in technology and packaging to add value to the animal nutrition input, said Jackson.

From the 1960s on fishmeal was commonly used in all stages of pig and poultry producton. “Over the past 50 years, we have seen the volumes used in mongastric feed decrease significantly. Today, fishmeal tends to be used as a specialist ingredient – in starter feed for chicks, in piglet weaning diets or juvenile salmon rations or in broodstock animals. The gains fishmeal inclusion enables at this life-stage justify its high cost,” ​he said.

And the latest industry note on fishmeal from Rabobank analyst, Gorjan Nikolik, reports that high fishmeal prices, driven by both falling supply and rising demand, are forcing a rationalization of users:

“As fishmeal becomes a strategic ingredient, its historical correlation to alternative vegetable based protein sources [soymeal] is likely to wane, as has already been the case for fish oil and vegetable oils.”​

Supply of fishmeal ​

Fishmeal and fish oil are produced mainly from small pelagic species such as anchovy or menhaden. 

The decline in supply of fishmeal has been caused by both lower wild catch of small pelagics and by the increasing use of the pelagics in several human consumption markets such as high value food ingredients, omega-3 capsules, or pet food, noted the Rabobank researcher. 

Fishmeal was in short supply in 2014 to 2015 due to the cancellation of the Peruvian fishing season in the second half of 2014. “Nevertheless the fishery has since normalized and a price correction is already occurring. However, this is part of the short-term dynamics. In the long term, we expect the upward sloping oscillating price line to continue,”​ said Nikolik.

Quota controls in global fisheries to ensure fishmeal production is sustainable have also been responsible for capping output. “Though, it is widely acknowledged that South East Asia has more to do in this respect,”​ said Jackson. 

A noteworthy exception to the declining fishmeal production trend is the use of trimmings from the processing of seafood for human consumption by producers in China, Thailand and other regions to cover, at least, a part of the fishmeal supply. “Although, so far, fishmeal produced from trimmings has not been able to change overall decline in supply, it has become an important source and is mitigating the shortage,”​ said Nikolik. 

Investment in technology ​

Jackson said as a result of its move to being a strategic ingredient in animal nutrition, fishmeal manufacturers have been trying to add greater value to the ingredient as both farmed animal and aquaculture producers  increasingly demand enhanced fishmeal quality, freshness, providence and sustainability of supply to warrant the price.

Key changes that have added value to fishmeal in the last ten years include the introduction of steam drying technology: “This innovation has seen more control as regards the drying temperatures used in fishmeal production resulting in a more consistent product with a higher level of digestible protein,”​ said the IFFO technical director. 

Fishmeal producers are also highly focused now on the freshness of the incoming raw materials so that quality is not undermined, said Jackson. 

As well as greater emphasis on quality and performance parameters, he said there has been a shift towards bagged products as an alternative to bulk or loose shipped material in an industry effort to increase fishmeal traceability. “Bags can be coded to indicate fishmeal factory conditions, the fishing vessels used to source the raw materials, and the origin of the product.”​ 

The kind of management in the fisheries and concerns over the use of forced labor in the fishmeal supply chain are also informing buying decisions, he said.

Alternative fishmeal ingredients ​

The Rabobank report notes the research being undertaken by both private and public institutions to find fishmeal substitutes: “The main alternative is to replace fishmeal with vegetable meals, such as soymeal. However, soymeal and other vegetable proteins have anti-nutritional factors (ANFS) to fish, which create limits on how much of these proteins can be used in feed.​

Processed animal proteins (PAP), such as poultry meal, are another ingredient that could provide the protein content in aquatic feeds, but these too do not have the same amino acid profile as fishmeal. Moreover, PAP themselves are limited in supply.​

Lastly, and most expensive on a per ton basis, are the vegetable meal concentrates. In this case, the ANFs are removed while the protein content is increased, making them a more suitable replacement for fishmeal. Although protein concentrates, especially soymeal concentrate, have become a key ingredient in aqua feed, they still do not have the same amino acid profile and the price can be 200 to 300% higher than vegetable meals.”​

But the report also looks at a host of other new fishmeal replacement options. Krill meal, for example, can be easily applied in feed formulas and can replace fishmeal completely, said the analyst.

“However, it is still not available in sufficient quantity, and it is questionable whether this will ever be the case,"​ said Nikolik.

He said it is also theoretically possible to farm fish, marine worms, mussels or other aquatic animals in an extensive way and then use these species to produce fishmeal.

“Proteins made from farmed insects and algae or seaweeds provide another logical point to look for alternatives,”​ said the researcher.

But he noted that scalability and high costs have so far proven to be key issues in preventing their development.

In terms of how exactly feed manufacturers will continue to reduce the inclusion rate of fishmeal, Nikolik guesses it will be a combination of better use of the currently available feed commodities and the application of novel ingredients still in the development phase.