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Limited Zinc Supply: Effects On The Feed Business

- May 25, 2018 -

Limited zinc supply: Effects on the feed business

Due to limited supply in the past few years, zinc prices have been high for a long time. All About Feed talked to several feed additive companies to see if and how this price increase affected their business.
    Zinc is considered to be one of the more important trace elements in livestock nutrition. It involves not only the development of the immune system but also the maturation and reproduction capabilities. Metals are also involved in the growth of hair, skin cells, hoof health and claw-horn development. The two zinc forms typically provided in the animal's diet are organic (ie, complexed, chelated amino acids, proteins) or inorganic (zinc sulfate, zinc oxide). There is also a new generation of hydroxy trace elements (covalent bonds with hydroxyl groups). Zinc mines spread all over the world, with major regions in China, Australia and Peru. However, in 2015 and 2016, some mines were permanently closed. This has a direct impact on global zinc supply and prices. Data from the London Metal Exchange (LME) show that this year's zinc prices continue to exceed 3,000 US dollars per ton.

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Regardless of the final form of zinc used in animal feed, feed additive suppliers must purchase zinc as a raw material before they can be converted into their products. When inorganic zinc is used, the price increase is often directly reflected in the price of commodities such as inorganic zinc additives. But when we look at the specialty (organic and hydroxy zinc sources), we see some minor direct effects. “This is because there are many processing steps for specialty products such as organozinc chelates. This will lead to the ultimate cost price of the specialty. For example, for rumen bypass choline in dairy cows. Costs associated with spray drying technology and other required processing steps. In comparison, the price of choline, the active ingredient, is low, and therefore, the increase in choline prices in the past six months has not had a significant impact on the final price of the product.The price of choline has almost doubled, but the cost of choline bypass to the rumen The impact of the price is much lower,” explained Arno van der Aa, business development manager at Orffa. Van der Sar admitted that zinc prices have been high in the past few years. “The high prices of raw materials like zinc have given us another incentive to convince new customers to use more bio-available zinc sources.
    In other words, despite the difference in price labels with inorganic zinc (“commodity” zinc), we are trying to convince The customer uses the zinc source with the highest efficiency and limited losses.The hydroxy trace minerals are still quite new in the market.van der Aa explained that not only its high bioavailability, but also its strong processing and stability make feed producers and premixes The device is able to minimize the loss of expensive trace minerals, these are currently the subject of high praise. The prices of other raw materials and raw materials have also increased. Van der Ab added: "A special case is the limited supply of vitamin A, and accompanied by Huge price increases. But this is unusual.

Cooperation with a number of zinc suppliers

Scott Hine, vice president and chief innovation officer of Novozymes International’s products and solutions in the United States, said: “There are some reports circulating that point to a decrease in zinc availability, but there have been no fundamental changes in the market structure or dynamics that would lead to any imbalance of demand or supply. Currently, we have not suffered any shortage of raw materials, nor have we been notified by the supplier of any issues that may affect the availability of our short-term zinc trace elements.” Hine believes that Novus can provide its customers with regular inventory of the animal feed industry and our unchanged production plan. . This is partly due to the company's cooperation with multiple reliable zinc suppliers and its close attention to market changes. “Using zinc products that optimize key production parameters is very important. Our two pairs of chelating molecules, made with HMTBa, can protect zinc minerals from the effects of antagonists, and can be absorbed more efficiently once they reach the small intestine. The result is Higher bioavailability, digestive tract stability, and residual methionine effects which can reduce the level of methionine needed per ton of feed, "Hine explained.

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The 2 zinc forms commonly supplied in animal diets are organic (i.e, complexed, chelated amino acids, proteinates) or inorganic (zinc sulphate, zinc oxide). Photo: Shutterstock

Focus on bio-available sources

Dr. Richard Murphy, research director of Alltech, believes that the current shortage of zinc supply and pricing issues cause many challenges and opportunities for premix and feed formulators. “Given the tight supply, they should first consider increasing the relative bioavailability of the zinc sources they use. Organically-bound zinc and its increased bioavailability allow formulators to maximize the absorption and efficacy of zinc. In addition, the use of stable The zinc chelates allow them to be reconstituted into finished feeds, which have reduced levels of organic zinc relative to inorganic sources, but do not affect performance.The choice of organic zinc must be considered, especially the gastrointestinal stability of individual products.

Organic minerals are only as effective as inorganic minerals.The formulation also needs to be alert to potential risks of heavy metal contamination during periods of limited supply. Although monitoring of trace element sources of heavy metals is strictly enforced in the EU, less stringent screening in the rest of the world may mean Low-quality batches of zinc may enter the feed chain, leading to an increased likelihood of contamination of the premix, feed ingredients, "Murphy Address.

Emphasizing a rewarding source

In addition, Bill Scrimgeour, president and chief executive officer of Zinpro, explained to All About Feed that the speculation and industrial use of zinc other than nutrients are two key factors that drive the supply and demand and price balance. “Although global zinc inventory levels have declined over the past five years, zinc market supply has not been interrupted.

Nevertheless, in the case of zinc supplements, a reduction in raw material inventories and any price increases may have a negative impact on feed costs and customer profitability. What really matters is whether the product can improve animal production performance and ultimately drive greater profitability of the producer. Regardless of the form, no one should pay more for zinc supplements without providing a positive return on investment. Regardless of the level of zinc price reached by the London Metal Exchange (LME), we will continue to work closely with our customers to provide the best animal performance and health, as well as a consistent return on investment. Moreover, peer-reviewed research shows positive The performance of the animals provides producers with confidence that our performance of trace mineral supplements will provide value for their production. "

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Organically bound zinc, with its enhanced bioavailability allows formulators to maximise the uptake and efficacy of zinc in animal diets. Photo: Bert Jansen

Outlook for the next few years

In the near future, the prospects for global mining zinc production are promising. According to miningreview.com website, by 2018, global mining zinc production will increase by 3.5% year-on-year to 13.7 tons and reach 16.6 tons by 2027. For example, a new mine opened in South Africa. At the same time, China's zinc output will stagnate due to declining ore grades and increasingly stringent environmental regulations. The downward pressure on zinc prices is good news for feed additive manufacturers that have zinc products in their portfolio. Zinc is still an important mineral in today's high-performance farm animals. With the increase in pressure on farmers, prices of feed and special feed ingredients must be kept at a low price to continue business. If the price of trace minerals is high, it is important to choose zinc supplements that provide the strongest return on investment.


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