Editorial Article
Lysine Below Cost: Why the World's Billion-Tonne Feed Market Can't Price Its Own Additives
Two numbers, one industry
The world produced 1.396 billion tonnes of feed in 2024 — 16.7 million tonnes more than the year before. That is growth of 1.2%. For the largest agricultural input after fertiliser, it is the entire expansion achieved in a year that included highly pathogenic avian influenza, a Chinese herd contraction and a European dairy recession.
Inside that one percent sits a second number that moves much faster and in the opposite direction. Through 2025, lysine, threonine and tryptophan traded at historic lows, with lysine on an FOB China basis quoted at or below the cost of production. The volume of the industry grew by a rounding error. The price of the most concentrated value inside that volume fell to the floor.
That divergence — flat tonnage, deflating molecules — is the actual condition of animal nutrition in 2026, and it explains why the industry’s winners are no longer the companies with the most capacity or the widest formulation book. They are the ones selling a molecule somebody else has decided to require.
The tonnage is real, and it has stopped growing
Alltech’s 2025 Agri-Food Outlook, a census drawing on 142 countries and 28,230 feed mills, put global feed production at 1.396 billion tonnes in 2024, up from 1.380 billion in 2023. The International Feed Industry Federation describes world compound feed production as just over one billion tonnes annually, with commercial feed manufacturing generating turnover above US$400 billion. The gap between the two figures is not a disagreement: IFIF counts commercial compound feed, Alltech counts total feed production including on-farm mixing and the non-compound share.
The species split does more analytical work than the headline. Poultry held 42.7% of global tonnage — a share so large that broiler economics, not GDP, are the primary driver of additive volume. Pet food grew fastest at 4.5%, dairy 3.2%, beef 1.8%. Regionally, Africa and the Middle East expanded 5.4%, Latin America 3.6% and Europe 2.7%, while Australia recorded an 11% rise in beef feed volumes. Asia-Pacific was the only region to contract, and almost all of that was China, down 6.5 million tonnes.
These are mill counts, not modelled compound annual growth rates. That matters for how they should be used: they describe a floor accurately and a trajectory only loosely. A single year of Chinese destocking can move the global number by more than a percentage point in either direction, which makes the regional line the one worth tracking rather than the world total.
The molecule layer went into structural deflation
If tonnage moved 1.2%, the price of the amino acids that give a ration its precision moved a great deal more. Reports through the second half of 2025 described lysine weakening in almost every region with suppliers fighting for share, threonine falling again after a stable period, and tryptophan losing the brief floor it had found. The market tone across the group was oversupply plus cautious buyers avoiding long-term commitments.
The European Union then provided the test that matters. In July 2025 the Commission imposed definitive anti-dumping duties of 47.7% to 58.2% on imports of lysine originating in China, following an investigation that found Union producers harmed by dumped imports. On any reading that is a hard intervention — a tariff at the level of the entire gross margin of a commodity molecule.
Valine had already run the experiment. European anti-dumping measures on Chinese valine were in force through 2025 and did not reorder the market; the price gap between Chinese and Western material narrowed rather than the duty being passed through. The mechanism is straightforward. In a molecule where installed capacity exceeds demand, a duty on one origin re-routes trade and defends the duty-protected producer’s cost base. It does not restore the global price, because the surplus does not disappear — it finds another destination.
The producers are building into the deflation anyway
Adisseo’s full-year 2025 results are the clearest statement of what this environment does to a specialist’s economics. Revenue rose 11% to CNY 17.23 billion. Gross profit rose 4%, to CNY 4.88 billion — a gross margin of roughly 28.3%. Liquid methionine volumes grew 13%, and specialties revenue grew 10%; those gains were partly consumed by sharp falls in vitamin A and vitamin E selling prices and by margins lost to customs duties arising from geopolitical tensions.
Read the two growth rates together: revenue up double digits, gross profit up mid-single, with record liquid methionine volumes behind it. That is a company buying volume in a market that will not pay more for it, and telling shareholders so. The cost response is equally explicit — a competitiveness programme delivering CNY 230 million of recurring savings.
And the capacity keeps arriving. A 150,000-tonne powder methionine plant with a DSA project at Quanzhou was more than 80% complete, targeting trial operation at the end of 2026. A 40,000-tonne debottlenecking of the European liquid OH-methionine plant at Burgos is fully operational. That is the shape of the whole sector: the marginal tonne is being built where the lowest-cost producer sits, for start-up into a market where the neighbouring amino acid already trades at cost.
Where price survived: the additive a regulator requires
Now the contrast. Bovaer — 3-nitrooxypropanol, or 3-NOP — is a feed additive that suppresses enteric methane in ruminants. It is included in feed at roughly one gram per 20 kilograms. It is approved for use in Great Britain following the Food Standards Agency’s assessment, approved in the European Union following EFSA’s, and according to dsm-firmenich is available for sale in 68 countries, with over 150 studies behind it and more than two years of commercial farm use. The FSA’s public position is that milk from cows given the additive is safe to drink because the compound is metabolised by the animal.
Notice what sets the price of that gram. Not a least-cost formulation exercise, where the buyer will swap it out for a cheaper alternative the moment the spread moves. The buyer of a methane inhibitor is the party that has to report an emissions number — a processor with a Scope 3 commitment, a retailer with a supply-chain target, a member state with an inventory line. That is a demand curve anchored to disclosure rather than to feed cost, and it behaves nothing like lysine.
The same logic shows up in Adisseo’s mix. Specialties revenue grew 10% against a commodity molecule whose price is set by Chinese capacity, and the company singled out strong volume growth in feed digestibility across poultry, swine and aqua. Enzymes and gut-health products are sold on a measurable performance claim per animal, not on a price per kilogram that a mill can arbitrage.
Species mix decides the volume, not the country
Because poultry is 42.7% of tonnage, the additive volumes that matter most are those attached to broiler production, where the sale is a performance claim measured in feed conversion. Pet food, at 4.5% growth in a 1.2% market, is the one segment where a formulator can still raise price — premiumisation there is a consumer decision, not a farm-cost decision.
Dairy is the soft spot, and the interesting one. Adisseo described the dairy market as difficult through 2025 even though slightly recovering. A sector under milk-price pressure cuts every input it can, which is precisely why a methane rule matters: it creates additive demand that is independent of the milk price, because the obligation sits on the emissions account rather than the ration.
What the market actually is
Anyone quoting a single number for this industry should say which perimeter they are on. IFIF’s US$400 billion is commercial feed manufacturing turnover. Pheonix Research’s Global Animal Feed Market report takes a wider perimeter, valuing the market at USD 645.80 billion in 2025 rising to USD 918.50 billion by 2033 at a 4.50% compound annual growth rate, with poultry the largest segment and aquaculture the fastest-growing. Neither figure is wrong. They are measuring different things, and a reader who compares them without noticing will conclude the market is twice the size it is.
What to watch
- China’s herd rebuild. The 6.5 million-tonne decline was the largest single movement in the 2024 survey. A reversal flips the direction of the only contracting region.
- Quanzhou at the end of 2026. Another 150,000 tonnes of powder methionine starting up into a market where lysine already cannot hold cost.
- Whether duties hold. The valine precedent says a duty defends a producer, not a price. The lysine duty at 47.7% to 58.2% will be tested the same way.
- Methane accounting. Sixty-eight-country availability is approval, not volume. The question is whether Scope 3 reporting and retailer schemes convert the gram per 20 kilograms into a specification.
- Pet food. Four and a half percent growth inside a one-point-two percent market is the last place in animal nutrition where price can still be raised.
Frequently Asked Questions
How large is the global animal feed market?
It depends on the perimeter, and the two published figures differ by basis rather than by error. The International Feed Industry Federation puts world compound feed production at just over one billion tonnes annually, with commercial feed manufacturing turnover above US$400 billion. Alltech's 2025 Agri-Food Outlook counted 1.396 billion tonnes of total feed production in 2024 across 142 countries. Pheonix Research's Global Animal Feed Market report uses a wider perimeter still, valuing the market at USD 645.80 billion in 2025 rising to USD 918.50 billion by 2033 at a 4.50% CAGR. Commercial mill turnover and the whole feed economy are not the same number.
Why are lysine, threonine and methionine prices so low?
Because installed capacity exceeds demand, and the surplus sits with the lowest-cost producers. Through 2025 lysine, threonine and tryptophan traded at historic lows, with FOB China lysine quoted at or below the cost of production and suppliers competing on share rather than price. Buyers responded by contracting quarter by quarter instead of committing long term, which removes any scarcity premium from the forward curve. Methionine behaved differently only because its supply base is more concentrated — it traded in a narrow range rather than collapsing.
Do the EU's anti-dumping duties on Chinese lysine restore the price?
The valine precedent suggests not directly. The European Commission imposed definitive anti-dumping duties of 47.7% to 58.2% on lysine originating in China in July 2025, and duties were already in force on valine. In valine, the measures did not reorder the market: the price gap between Chinese and Western material narrowed, meaning the duty was absorbed rather than passed through. In an oversupplied molecule, a duty on one origin defends the protected producer's cost base and re-routes trade; the global surplus remains and finds another destination.
Is a methane-reducing feed additive like Bovaer a genuine market?
It is a genuine market with a different demand curve from every other additive. Bovaer, or 3-NOP, is included in feed at about one gram per 20 kilograms, has been assessed and approved by the UK Food Standards Agency and by EFSA, and according to dsm-firmenich is on sale in 68 countries with over 150 studies and more than two years of commercial use. Its buyer is not only the farmer but the party that must report an emissions number — a processor with a Scope 3 commitment or a retailer with a supply-chain target. That anchors demand to disclosure rather than to feed cost.