Indonesia is set to invest $1.2 billion in expanding feed mill infrastructure, aiming to enhance poultry feed production and address increasing demand while tackling regional disparities.
Major Push for Feed Security
The Indonesian government, potentially in collaboration with the state-owned Danantara Investment Management Agency, has unveiled a significant initiative to boost domestic livestock productivity and food security through a comprehensive network of feed mills. This ambitious plan is driven by the forecasted rise in poultry feed demand come 2026.
The implementation of this project will occur in two phases. Initially, 12 sites will be selected for the construction of new feed mills, followed by the establishment of an additional 18 mills. The construction of the first phase is slated to commence in 2026.
Focus on Under-served Regions
This project prioritizes areas like Kalimantan, Sulawesi, and Papua, which have historically faced feed shortages. In contrast, regions like Java and Sumatra will receive fewer new factories due to their already sufficient feed production levels. The objective is to balance feed availability and stabilize local markets across Indonesia.
In tandem with the feed mill initiative, the Agricultural Ministry has proposed a fixed purchase price for corn sourced from farmers, alongside a ceiling price for livestock producers. Officials have emphasized that these measures are essential for ensuring price stability and providing enhanced protection for farmers.
A Rise in Poultry Feed Consumption
The new investment initiative is expected to significantly boost Indonesian feed production. By 2026, it is projected that feed output will escalate to between 35 and 40 million tons, a notable increase from the 26 to 28 million tons estimated for 2024. According to Tri Melasari, the Director of Feed at the Directorate General of Livestock Production and Animal Health, the chicken population—including broilers and layers—is predicted to surge to approximately 4.8–5 billion heads.
This increase will consequently drive demand for poultry feed, with projections suggesting that broilers will require 15.6 million tons and laying hens will need 20.2 million tons of feed in 2026.
Corn Prices and Global Impact
However, the pace of growth for the Indonesian feed industry hinges on various factors, including domestic corn prices and international trade dynamics. According to Melasari, fluctuations in the Indonesian exchange rate and trade relations—particularly between the U.S. and China—will heavily influence commodity pricing.
