Livestock market update June 2016

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Livestock market update | The Herald June 10, 2016

Symposium

The Symposium 2016 held at ART Farm last month was a very successful event with an attendance of 200 people, most of whom were small-scale producers. Excellent speakers and interesting topics made for a stimulating and thought-provoking function that was supported by 18 exhibitors, all of whom exhibited their latest technologies and products. The event was opened by the Deputy Minster, Livestock, Honourable Zhanda who noted that “…This Symposium comesat a time when the livestock industry is wrestling many challenges that has affected both the supply and demand of livestock products in the country.

On the supply side, the industry has been plagued by two successive years of below normal rainfall that have affected the availability of grazing and drinking water for stock as well as key raw materials for stockfeed manufacture. Of particular concern has been the 2015-2016 El Nino induced drought that has affected not only Zimbabwe, but also countries across the Southern African region. The resultant domestic crop failure has once again necessitated the country to rely on imports from outside the region, leading to the high cost of stockfeed manufacture”.

Honourable Zhanda commented that these trends have had significant effects on the livestock industry. For example:

Broiler production that had recorded continual growth since 2009 recorded a 5% decline between 2014 and 2015.

Egg production in the large-scale sector recorded an unprecedented 24% decline between 2014 and 2015. However, this was counteracted by a 31% increase in small to medium scale egg production.

The pig producing sector which had recovered significantly during 2013 and 2014 was showing signs of destocking during 2015. Even though pig slaughters increased from 131 000 to 141 000 between 2014 and 2015, a higher proportion of these slaughters were of manufacturing grade, indicating that farmers were sending breeding animals for slaughter.

Interestingly, though, stockfeed manufacturers showed a 14% growth, largely due to growth in cattle feeds as most farmers were supplementing reduced grazing due to drought.

He also noted that ….” My Ministry remains committed to work closely with stakeholders in the private sector as well as development partners to confront the challenges facing the livestock sector”.

Stockfeeds Sector

Monthly procurement of raw materials and production of stockfeeds in the first quarter of 2016 averaged 40,684 and 40,868mt respectively, representing 13% and 7% increase over the same period in 2015. The value of raw materials procured and feeds produced in the first quarter of 2016 were $14.5m and $20.9m/month, respectively.

Average monthly procurement of maize and soya bean equivalent in the first quarter of 2016 were 18,177mt (worth $5.5m) and 10,738mt/month ($5.5m) respectively – the business growth for these raws for the quarter was 26% (12% in value) and 2% (-2%) over the same period in 2015. Maize and soya procurements accounted for 66% of all raw materials procured by weight and 76% by monetary value.

Production of poultry feeds continued to dominate stockfeed industry in the first quarter of 2016 with a monthly average of 29,097mt (worth $16.0m), an increase of 8% (0% in value) over the same period in 2015. Poultry feeds accounted for 71% of all feeds produced by weight and 77% by monetary value. By comparison, pig and ruminant feeds accounted for 11% and 9% of the total value of feeds produced, respectively.

In January to March 2016, production of broiler grower, layer rearing and production and breeder feeds increased by 19%, 42%, 48% and 10% respectively. Production of broiler starter and finisher feeds decreased by 15% and 7% respectively, compared to the same period in 2015. The dramatic increase in layer feeds reflect the 49% increase in sexed pullet sales in 2015 compared to 2014.

The average price of raws procured in the first quarter of 2016 were 1% lower than prices in the last quarter of 2015, driven by softer maize (-11%) and solvent extracted soya meal (-4%). In general, prices of feeds in the first quarter of 2016 had decreased between 3 and 8% compared to last quarter of 2015. The average weighted broiler and layer feed prices were $590 and $493/mt, respectively, both 7 and 3% lower than prices in the last quarter of 2015.

Beef Sector

The crash in the global leather market highlights the importance of a vibrant domestic market for the development of the livestock and leather value chain. Stable supply of quality hides and skins is needed to drive growth and development of the leather tanning and manufacturing industries. The Zimbabwe Association of Abattoirs is finalising a position paper on the livestock and leather industry that proposes some modifications to existing policy.

Farmers are not taking their cattle to abattoirs, which is very uncharacteristic of this period, and because of low throughput from producers, beef prices are starting to firm. The situation is also being worsened by the cash crisis.

Grade Producer Price Wholesale Price

($/kg) ($/kg)

Super 3.35 3.6 – 3.70 Commercial 2.50 2.90

Economy 2.35 2.70

Manufacturing 1.90 2.30

Dairy Sector

Milk production in April was 5.3 million litres, similar to production in March, and an increase of 15% over April 2015.

Total production for January to April 2016 was 21.3 million litres compared to 18.1 million litres during the same period in 2015, an increase of 17% year-on-year.

The Zimbabwe Association of Dairy Farmers will be hosting their Annual General Meeting, Expo and Conference and Dairy School in July.

Poultry Sector

Reduced consumer purchasing power is impacting on the chicken meat market and on poultry production, Zimbabwe’s second fastest growing agricultural industry after tobacco. Along with reduced demand for chicken, broiler production continues to decline, forcing many poultry farmers who depend on chicken for their livelihood out of business.

The latest quarterly report of the Zimbabwe Poultry Association shows that broiler production has continued to decline over the last year, after five years of phenomenal growth.

Broiler production currently stands at 1, 5million birds slaughtered, down from 1, 8 million for the same period last year. While chicken remains the most widely consumed meat in Zimbabwe, market demand for chicken has dropped significantly over the last year in the economic downturn, and more recently the liquidity crunch, as consumer buying power is eroded.

In the current drought, broiler producers now find themselves squeezed between shrinking market demand for chicken on the one hand and escalating production costs as the price of stockfeed – the biggest cost to the producer – increases. The maize deficit in the SADC region means that non-GM maize, a key stockfeed ingredient, has to be sourced from distant markets this year. High pre-shipment and other inspection costs of maize and the other main feed ingredient soya, imported into Zimbabwe in compliance with the country’s strict regulations on GM crops is also driving up the cost of stockfeed manufacture. This increases the production cost to the farmer as well as the end price of chicken to the consumer.

Pork Sector

The weak demand for pork products that is currently being experienced is not just a problem of low disposable income and the cash crunch. There has been a gradual shift in consumption patterns away from pork to other meat products and consumers are deliberately choosing other meats. The industry needs to focus on strategies to stimulate demand for pork products and appeals to government to enable the smooth importation of key feed raw materials such as maize and soyabean.

Pig diets are currently under the spotlight as concern has been raised about the consistent supply of maize and soya. In the recent edition of Hog News, Issue number2, the Pig Industry Board have noted that sorghum can broadly be classified in two groups i.e. white and red. Like maize, it is an energy source but it contains more protein than maize. It is, however, important to note that pig diets should be formulated to meet essential amino acids, especially lysine, and not the crude protein requirements of the pig. White sorghum can be used partially or as a sole source of energy in pig diets for all classes of pigs. Red sorghum is not as good as white sorghum and should not be used for lactating and piglet diets. Red sorghum contains tannins that reduce its nutritive value in pigs. It is advisable to mix red sorghum with other grains for the diets of other classes of pigs. If the sorghum is going to be fed at 75-100% of the energy source, it is advisable to increase the protein content of the diet by 1-2% by adding 22.7 kg of soyabean meal per ton of mixed diet. The additional protein is needed to overcome the detrimental effect of tannins on protein digestibility if the same performance is to be expected as when feeding maize. Grain sorghum should be processed, such that there are no or very few whole kernels, if it is to be used efficiently in pig diets.

Meat Processing Sector

In continuing their lobbying efforts to the trade of mechanically deboned meat (MDM) regulated, the Meat Processors Association of Zimbabwe have drawn up suggestions to dispel the negative perception about MDM and its confusion with chicken imports which will be tabled with the authorities. The sector also faces the challenge of raising awareness about MDM as an important primary raw material in meat processing.

The import quota and shortage of cash have negatively impacted upon the market and the need to use “plastic” money is essential. The market is subdued and it is hoped it will improve in the near future as sales tend to increase in winter.

Fish Sector

The Zimbabwe Fish Producers Association will be holding their Inaugural General Meeting on 22nd July to constitute the Association and offer membership to fish producers. Presentations on feed, fish health, pond construction, cage farming as well as the economics of fish farming will be given at the event.