Yuuuup, I am experiencing everything you guys have said. I feel the NPC are quite a bit overpowered, it begins at the R100-120 races, at this point the npc will have much higher stats than you even if you have been feeding it G1 food the entire time.
I did some experiments and invested in some G2 food to see the difference, I still got crushed by NPC but not so hard. So I guess if you only use G1 food for sake of having extra stats while you level up your breeder chocobo, by the time you reach those higher level races the stat difference between you and the NPC are so high since when you use G1 food you lose potential extra points to stats you would have gotten if you use G2 or G3 food.
But who wants to invest 110,000 MGP on G3 food from rank 1 - 40 for each chocobo they level for sake of breeding? G2 food is more gentle on the MGP / Gil but prices are different on each server so~