Emerging non-GMO feed market presents opportunities and challenges

Published: April 29, 2016
Issue: ,

The growing market for non-GMO verified meat, poultry, dairy, and egg products is increasing demand for non-GMO animal feed products. More feed suppliers are getting their products verified, but the new non-GMO feed market faces challenges such as oversupply and uncertain consumer demand.

According to Megan Westgate, executive director of the Non-GMO Project, sales of Non-GMO Project meat, dairy, and egg products are growing fast. “These categories are growing rapidly due to increasing consumer demand for animal products and byproducts sourced from animals that have not consumed GMO feed,” she says.

There are currently 1,352 Non-GMO Project verified products in the meat, fish, and eggs category and 287 verified dairy products.

Consumer demand is leading more feed suppliers to get their products Non-GMO Project verified. Scratch and Peck Feeds, which sells to the urban backyard chicken market, was the first feed producer to get their products Non-GMO Project verified. “Non-GMO verification is important to us and our customers,” says Diana Ambauen-Meade, president of Scratch and Peck. The consumer can have peace of mind knowing that what they are getting is non-GMO because it is third-party verified.”

Hiland Naturals’ got non-GMO verified because of pressure from poultry producers who wanted to sell Non-GMO Project verified poultry and eggs, says Paul Sommers, Hiland’s director of operations. It’s consumer driven. They want to see the Non-GMO Project seal in retail stores.”

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Non-GMO Project verification can increase the efficiency of the supply chain, says Kade McBroom, president of Malden Specialty Soy, LLC, which supplies Non-GMO Project verified soybean meal, oil, and hulls. “Being verified makes it easier for our customers when they get their finished feed product verified. Instead of providing (GMO) test results to every customer we can give them our certificate of compliance (to the Non-GMO Project standard). This makes the supply chain flow much smoother.”

Some feed suppliers that don’t have Non-GMO Project verified products say they may pursue verification.

Non-GMO Project verification is very doable and will be an economic value decision going forward,” says Thomas Kopp, CEO of Choice Grain, LLC.

James Frantzen, owner of Riverside Feeds, says non-GMO verification will help grow the non-GMO feed industry. “Third-party certification for non-GMO products provides a trustworthy verification for consumers and buyers. We need that kind of industry support in order to create the real demand for non-GMO food products, thus creating a stronger non-GMO feed and grain market.”

Poultry driving non-GMO feed demand

Poultry is the main driver of the non-GMO feed market, according to several suppliers. “The poultry industry, both non-GMO and organic, is driving the demand for feeds far more than hogs, beef, and dairy combined,” Frantzen says.

There are currently more non-GMO verified egg producers than meat and dairy, due in part to the shorter lifespan of hens. “It is faster to transition a flock of hens to non-GMO feed than a herd of dairy cattle,” says Westgate.

She also thinks that more dairy producers will transition to non-GMO feed this year. Dannon, the leading yogurt producer in the U.S., recently announced that it would transition to non-GMO feed for its dairy cows. Ben & Jerry’s Ice Cream is spearheading a project to increase production of non-GMO feed for dairy in the Northeast.

Pork could be another strong market. “Swine will have a significant impact in the near future,” predicts Kopp.

The backyard chicken trend has also created a strong market for non-GMO feed. Scratch and Peck Feeds’ sales grew by 40 percent in 2015. “People don’t want to support products from factory farms,” Ambauen-Meade says. “They want a closer connection to food, and backyard chickens are an easy way to do that.”

Whole Foods’ impact

Whole Foods Market is also having a big impact. Companies that sell meat and dairy products to Whole Foods are getting their products non-GMO verified to avoid the retailer’s GMO labeling requirement, which takes effect in 2018. Non-GMO verified meat products will require verified feed.

According to Rhonda Cole, sourcing agent for Whole Foods Market, a full range of products, including poultry, turkey, pork, dairy, fish, and cheese are being transitioned to non-GMO verification. “We’re looking at all meat, dairy, and egg programs in our stores today,” she says.

Whole Foods is requiring that suppliers of those products seek third-party verification through either the Non-GMO Project or NSF International’s Non-GMO TrueNorth program. “Whole Foods is passionate about quality claims,” Cole says. “Non-GMO claims on retail products that are self-certified require consumers to research how the company validated their process, while third-party verification allows them to access these public standards more easily.”

Variable non-GMO feed market

Non-GMO feed suppliers report varied market conditions—from strong demand to oversupply and soft demand—depending on the supplier and region of the country.

Demand is pretty high,” Sommers says. “We’re still experiencing rapid growth.”

We sell everything we make,” says Kent Davies, sales and marketing representative at Chaffhaye, Inc., which sells Non-GMO Project verified alfalfa feed. “Over the past six years, we’ve grown about 30 percent each year.”

On the other hand several suppliers see weak demand with an oversupply of non-GMO corn and soybeans.

The marketplace is flooded with Non-GMO grains, which I believe is a result of many large farms that have decided to not use genetically modified seeds,” Frantzen says.
A lot of people are interested but there’s not a lot of demand. The premium that consumers will pay for non-GMO-fed chicken or eggs is undefined,” says Tim Boldt, soybean meal merchandising manager at South Dakota Soybean Processors, which is having several feed products Non-GMO Project verified.

A lot of future potential”

Despite the challenges, non-GMO feed producers see a bright future for the market, particularly as more companies, including major manufacturers and brands, are labeling their products “non-GMO.”

The potential for conversion to non-GMO feeding programs to meet consumer demands provides hope for future demand,” Kopp says.

I see a lot of future potential as more food companies are now labeling for GMOs,” Frantzen says.

Another positive is that more farmers want to grow non-GMO grains.

There’s a lot of interest from the producers’ side,” Boldt says.

Cole agrees. “We have strong interest from the grower community to grow non-GMO corn and soybeans. The challenge is to embrace the non-GMO trend in a fast enough way to take advantage of growers’ interest.”

© Copyright The Organic & Non-GMO Report, , 2016