The Need for Feed

November 14, 2016

Noelle Fujii-Oride,

The high cost of animal feed has long hindered the meat, poultry, dairy and seafood industries in the Islands, but local efforts on several fronts aim to reduce those expenses.

Shipping feed from the Mainland costs about $150 to $200 per ton – often doubling the total price of feed to local companies, according to Jesse Cooke, a senior investment associate with Ulupono Initiative. And, since feed contributes 50 to 70 percent of the total cost of raising animals in the Islands, it is currently difficult for Hawaii companies to compete on price with Mainland or foreign producers.

Years ago, according to Shaun Moss, president of Hawaii Pacific University’s Oceanic Institute, “There was this recognition that if we’re going to grow our own animal meat here in Hawaii for human consumption we need to find a way to reduce the financial burden of getting feed for those animals.”

For over 10 years, the Oceanic Institute has looked at using local ingredients to produce animal feed, including crops grown specifically for feed ingredients, waste products from the agriculture and biofuel industries, and slaughterhouse and fish-processing waste. The result was a database of nutrition profiles – analyses of protein (amino acids), lipids (fatty acids) and carbohydrates – of potential ingredients for nutritionists to match to the requirements of the species they’re looking to feed.

The Paniolo Cattle Co., shown feeds its cattle as much as possible on natural forage, but needs supplemental feed to get them to their full potential. Like other Island companies, Paniolo says it wants local feed, but it has to make sense financially. Photography by Megan Spelman

This work led to the testing of feeds with by- and co-products of papaya and algae. Moss says about 40 percent of papaya grown in Hawaii never go to market because the fruit has flaws and ends up in landfills. Using waste papaya, the institute grew fungal protein that was effectively used as a high-quality protein in feeds for shrimp and fish. In another recipe, the institute used a protein cake left behind from Kona-grown, single-celled algae to effectively replace fish meal in aquatic animal feeds.

“Currently, most of the protein in pet food and aquatic aquaculture animal feeds comes from fish meal,” Moss says. “And there’s concern that the fish-meal supply chain is not a sustainable supply chain. So the industry is very interested in looking for fish-meal replacements. So this algae paste becomes interesting, the fungal protein we’ve grown off the papaya looks interesting and there’s a whole host of other potential ingredients.”

» LOCAL CHALLENGES

The biggest cost for Kampachi Farms in Kona is fish-feed ingredients. Co-founder and CEO Neil Sims says the ingredients can include fish meal and fish oil that are wild caught from sustainable fisheries or come from the trimmings of commercial fishery byproducts.

In the last two years, Kampachi Farms tested diets for its fish that eliminated fish meal completely, and instead used ingredients such as soy protein concentrate, soy oil, micro-algae and poultry processing by-products, which could come from anywhere, Sims says. “They were very expensive diets because they were just research scale, but it shows that you don’t need to feed fish to grow fish, you just need the right balance of amino acids and fatty acids.” In addition, the company conducted trials with by-products from algae grown in Kona.

The company’s focus isn’t only on locally sourced ingredients; it wants products that have the smallest environmental footprints but the highest nutritional values. “We will go anywhere in the world to find them,” Sims says.

He adds the challenge to getting an inexpensive feed is being able to produce it at scale: “That is why Nebraska is a lot better place for people to be growing soybeans than Hawaii. And Peru is a lot better place to be using fish by-product than Kona – because we’re a very small-scale industry here in Hawaii, and that’s a problem.”

Hawaii’s poultry industry faces infrastructure challenges, such as the lack of a large-scale processing facility for broilers and the closing of the Honolulu Harbor flour mill that produced wheat millrun as a by-product, Cooke says. The cost of energy is another issue because feed often has to be dried – a process that may use fans or heaters, which rely heavily on electricity. “Hawaii’s high price of energy means the impact is even greater for us,” he says.

Four years ago, Ulupono funded a poultry-feed trial conducted by a Maui-based agricultural services company called Farm n’ Forages to study local by-products that could be used in feed. The study found replacement diets that used algae and wheat millrun were able to replace a little more than one-third of the imported ingredients in a commercial layer ration. Farm n’ Forages owner Kristin Mack says being able to compete with imported feed prices is difficult, especially since Hawaii’s poultry industry isn’t big: “The feed production industry is definitely an industry with lots of moving components in relation to supply and demand, which makes it a challenge to produce anything locally for a relatively small livestock industry.”

Paniolo Cattle Co. livestock manager Jason Van Tassell echoes that statement. The company feeds its cattle as much as possible on natural forage, but it also wants a consistent product and Hawaii’s inconsistent rainfall can’t always produce high-quality forage. That’s when supplemental feed is needed to help cattle reach their greatest potential. However, while the company wants to buy local products, it has to make economic sense.

“It would be a great thing for the feed mill to be online, and I hope there are some resources available, whether it’s feed or by-products from some of the other farming operations, whatever can go into a sustainable forage supplement, and whether it’s for my cattle or for the neighbor’s pigs or chickens, goats, whatever it is,” Van Tassell says. “The question will be: What’s available to convert into a pellet and what is the value of that pellet both from a nutritional standpoint as well as economic viability?”

» PRODUCING AT A SCALE

For a commercial feed mill to be profitable, Moss says, it would typically produce one feed at a time and operate 24/7. Seeking solutions, Ulupono partnered with Oceanic Institute to construct a prototype feed mill in Hilo, which is scheduled to be fully operational by the first quarter of 2017. The research feed mill will evaluate fish, shrimp, cow, pig and chicken diets that utilize locally sourced ingredients. It will also be commercial in the sense that it’ll be able to test formulations and ingredients on a large scale – about 450 tons of aquatic feed and 900 tons of terrestrial feed per year – though it won’t operate 24/7.

“No one has been able to produce meaningful aquaculture food to test on a commercial scale,” Moss says. “And so I think that’s a hugely important contribution that the Oceanic Institute will be able to make. We’ll not only be able to test locally sourced ingredients, but we’ll be able to evaluate them on a scale that’s meaningful.”

One goal is to avoid a repeat of the heptachlor scare of the early 1980s. Animal feed was made from leaves of Hawaii pineapple plants after the fruit had been harvested, and residue from the pesticide heptachlor sprayed on the plants ended up in the milk from local dairy cows. Moss says the steps that will be taken to prevent contamination at the feed mill will include open dialogues with organizations and individuals providing the ingredients and other pretreatment steps. If there is suspicion that an ingredient contains toxins, he says, the institute has the analytical capacity to detect the presence or absence of them and their concentrations.

The goal of the research feed mill is to pave the way for a commercial mill. “Once [the feed mill] gets to a critical size, and we have feed formulation based on locally sourced ingredients that produce good performance among the various animals we’re feeding, we’re hoping a commercial company will come in and build a commercial feed mill in Hawaii,” Moss says. “This research feed mill of Hawaii is the first step in essentially a two-step process.”