Perspective of market barriers in China's feed industry

In the early stage of China's feed industry development, the proportion of industrial feed is relatively low, and there is a large proportion of self-contained feed. Due to the huge market demand in the feed industry, many small and medium-sized feed enterprises can purchase premixed and concentrated materials, and purchase simple production lines to produce batch materials. The barrier to entry is relatively low.

In recent years, industrial feed has gradually become popular, market competition has intensified, and the industry's profit margin is low. The market competition is gradually reflected in the competition of technology, research and development capabilities, large-scale competition and competition for financial strength. Many small and medium-sized feed enterprises have no core technology. The scale advantage and management advantage have begun to gradually withdraw from the market. The current competition situation of the feed industry has high requirements on technology, scale, marketing, brand, management, etc. The specific performance is as follows:

1. Technical barriers

Feed technology is mainly embodied in formula technology. Feed formula technology refers to continuously optimizing the feed formula by studying the nutritional needs of animals, promoting the efficient growth of animals, and at the same time reducing the cost of feed, and ultimately improving the breeding efficiency of farmers.

China Industrial Economic Research Network pointed out that there are many small and medium-sized feed enterprises in the feed industry. The supply of medium and low-grade feed products is excessive, mainly adopting price competition. Due to fierce competition, many enterprises have been unable to earn profits and survive and develop and gradually withdraw from the market. In the fierce market competition, only feed enterprises that evade or do not rely on price competition, but mainly rely on competitive means such as product quality and cost performance can survive and develop in the feed industry. The product quality and cost performance must be guaranteed by feed technology. Therefore, mastering feed technology is a necessary condition for the survival and development of current feed enterprises.

Mastering feed technology is more difficult. First, the difficulty of feed technology is reflected in the sustainability of technology research and development. Feed technology is not only a one-time high-quality formula, but the key is to continuously optimize the feed formula according to changes in the feeding area, changes in animal nutrition requirements, and changes in national regulatory policies, and maintain a high cost performance of products for a long time. Competitiveness. This requires feed companies to not only make one-time investment in feed technology, but to establish a strong R&D team, establish a long-term research and development mechanism, and continuously invest in research and development. The continuous investment in technology research and development has created a high barrier for many small and medium-sized feed enterprises. Second, the difficulty of feed technology is reflected in the need to master feed technology for a longer period of time. The feed formula is mainly formulated according to the animal's nutritional needs. Although each country has a standard database of animal nutrition needs, the animal nutrition needs vary according to different varieties and different culture areas, and the feed enterprises need to gradually accumulate and improve their own animal nutrition needs. A database can be used to design a cost-effective formula.

In addition, under the trend of large-scale farming, the needs of customers have undergone great changes. Experts from China Industrial Economic Research Network believe that large-scale farms need not only the cost performance of products, but also the continuous leading ability of products, and also require feed enterprises to have Perfect service capabilities. The food safety issue has caused people's attention to feed safety to continue to improve. How to exert product advantages under the requirements of laws and regulations is a technical difficulty. The improvement of people's consumption level requires livestock and poultry and aquatic products not only to meet the needs of protein nutrition, but also to put forward the requirements of flavor, taste and even functional, such as green food, organic food, etc. Therefore, the production technology of feed needs to be constantly updated and improved. .

As the feed industry gradually enters a new stage of competition, it is no longer possible to develop in the feed industry because of the lack of capital and marketing means. However, mastering feed technology requires higher R&D investment and longer accumulation. Therefore, the feed industry has high technical barriers.

2, scale and financial barriers

Feed products have restrictions on the transportation radius, and more adopt the mode of territorial operation. Under normal circumstances, the transportation radius of the batch material is 60~100

Kilometers, concentrated material is 150~200 km, premix is â€‹â€‹300~500

Kilometers. China Industrial Economics Research Network believes that if feed enterprises want to achieve rapid development in scale, they need to expand the scale of enterprises and increase the number of production enterprises. At the same time, feed production enterprises have higher requirements for capital turnover, and financial strength will become one of the limiting factors for entering the feed industry.

In addition, the price of feed ingredients mainly based on corn, soybean meal and fishmeal fluctuated greatly, while the overall sales gross profit rate of feed products was low (about 10%), raw materials accounted for a large proportion of production costs, and the price fluctuation of feed ingredients to feed enterprises. The benefits have a greater impact. Large-scale enterprises can reduce costs by purchasing in bulk, and at the same time, they have the strength to equip specialized institutions or personnel to study the price trend of feed ingredients, which can reasonably grasp the timing of feed purchase and avoid the risk of changes in the price of feed ingredients.

In the feed operation, the purchase of raw materials has been sold from the past to the current cash on delivery or even after the first payment. Therefore, it is required that the feed sales can be delivered to the goods or paid immediately. At present, there are still a large number of enterprises with product sales, which makes their capital turnover difficult. Rapid capital turnover is one of the key factors in the success of the feed industry. With the growing scale of large-scale feed enterprises, industry mergers and acquisitions are becoming more active, and the funding barriers for the feed industry will gradually increase.

3, talent barrier

The feed industry is characterized by low gross profit margin, high turnover rate, profit mainly relying on rapid asset turnover, and the feed industry is also facing the risk of a sudden increase in raw material prices, resulting in a significant increase in production costs, thus requiring feed enterprises to have efficient management. Level. Large-scale enterprises have been established for a relatively long period of time. Most of the management of the company has experienced a complete industry development cycle. The industry has rich experience and deep experience in the industry. In practice, it has accumulated a lot of valuable management experience and can make more effective decisions. To promote better and faster development.

4, brand barrier

Brand is a comprehensive external manifestation of enterprise technology, scale and marketing. Brands have become an important means of expanding the scale of large-scale feed enterprises. However, the formation of a brand requires time to accumulate. Newly-entered companies often increase the difficulty of business development because of low visibility, and also increase the cost of market development. In particular, as the industry's profit margins decrease, the weaker brands will have lower profitability, which will affect the survival and development of enterprises.

China Industrial Economics Research Network believes that in the process of business expansion of large-scale feed enterprises, especially in the process of opening up new markets, brand influence is increasingly important. High-profile feed brands are more easily accepted by aquaculture households. In addition, through business and equity cooperation, exporting brands can achieve rapid growth.

5, management barriers

The success or failure of the feed industry competition depends to a large extent on the high-speed expansion capability of the external market and the low-cost operation capability of internal management. How to turn a product into a profit through sales is a key factor in the success or failure of a company. At the same time, how to reduce procurement costs and various expenses in operation is the basic element of modern enterprise management. The low-price competition in the feed industry, the fluctuations in raw material prices, and the rapid rise in labor costs have all tested the ability of managers. At the same time, crisis management, institutional innovation, long-term incentives, and personnel training have placed new demands on managers' ability to continue to operate. Especially in the trend of accelerating industry integration era, how to face competition and cooperation, stable operation or active expansion, diversification or integration will become new management barriers.