Archive for June 2014

Supplying Local and Export Markets

A frequent question asked by those starting out in ostrich farming is for information regarding export requirements.   Our response is always:  “there is no direct answer as regulations are dependent on the veterinary health and disease status of the exporting country and the requirements of the importing country”.  Each country or region, such as the EU, set their own requirements.

The drivers for the different regulations are of course disease control and meat hygiene.

Regarding disease control the OIE (The World Organisation for Animal Health) has developed systems referred to as WAHIS (World Animal Health Information on-line reporting System).  WAHID (The World Animal Health Data Base) is the resource that stores this information.

This article is focusing on recent developments in these new information systems.  Whilst they are a great resource, they also illustrate the importance of focussing first on developing the local markets.

Animal Disease Control Resources
The ever increasing international trade of livestock and meat have meant that controlling disease is increasingly important when trading across international borders.  This web page of the OIE summarises the current reporting systems for notifiable diseases throughout the world.

For those not only new to ostrich production but also new to livestock production, the message to get from Figure 1 is the important role of the government veterinary services.   National Veterinary services are the government veterinary services required to monitor diseases, report outbreaks, put in place and monitor control systems when any disease outbreak occurs that carries the risk of rapid transmission to other farms.

Figure 1 - Risk Notification Systems [Large Version]

113-notification-processes-sm
The national veterinary services of the country with infected livestock are responsible for notifying the OIE of such outbreaks.  The OIE then issue alerts to notify any regions, such as neighbours and trading partners that are at particular risk to enable those countries to take appropriate action to protect their domestic livestock.

It is this process that the South African industry has undergone during their various disease outbreaks in the ostrich flock over the past decades and the most recent outbreak still causing a ban on the export of their meat.

The World Animal Health Data Base (WAHID) provides an excellent resource to gain a better understanding as to why it is impossible to have a set of rules for a single species regardless of the importing and exporting country.

This system is under development, but still able to provide a helpful tool:  Countries Sanitary Situation Comparisons.  That link enables the visitor to type in an exporting country and importing country to obtain lists the Probable Disease Hazards, the Possible Disease Hazards and the Diseases that are unlikely to pose any hazards to the importing country as they are currently unknown in that particular country.   It illustrates well just why import and export regulations vary from country to country and why it is impossible to have a “one size fits all” approach.

Figure 2 is the OIE’s illustration to show the interactions between the different processes.

Figure 2 - WAHID and WAHIS [large version]
WAHID interface

The Benefits of Developing the Local Market
The motivation given for exporting when starting out in ostrich farming is usually because there is no established market in their country.  Is this a valid reason?

In general the basic regulations required for health and hygiene at the slaughter plant are standardised across the all species, such as requirements for a Hazard Analysis Critical Control Program (HACCP), residue testing procedures and so on.  These requirements should be available from your national veterinary services.  A slaughter plant must be operational to enable certification.   This is just one good reason for ensuring the business plan for a new ostrich business is not solely based on exporting meat.

If there is no plan to develop local markets, then the business plan must include the costs of slaughtering birds with limited or no revenue from those birds slaughtered during the certification process.

Another reason for developing the local markets is to ensure that there is a market for the meat in the event export markets are shut down for any reason.  A factor to remember is that an outbreak of a disease that impacts ostrich, such as Avian Influenza or Newcastle Disease, breaks out in any other poultry specie it affects the export status of all avian species of the country of that outbreak.  It was an outbreak of H5N1 Avian influenza in poultry that stopped the export of the Israeli ostrich meat production even though the ostrich were not affected.  They had not developed any domestic markets for their ostrich meat.

The main reason there is no developed ostrich meat market in most countries is lack of commercial levels of production.  If there is no commercial production, there is no way to supply the market.  Many newcomers look to the export market assuming those markets are already established in other regions.  The answer is they are not because to date the industry has failed to supply.  It is the inability to supply that remains the barrier to market development not the lack of demand.

The scope of the market is illustrated here.  The challenge is firstly understanding the time taken to build volume and the secondly the investment required to achieve that volume.

Today’s meat markets are dominated by the efficient mainstream industries that over the past few decades have improved their production systems extremely successfully.  They have addressed many management issues, including genetics, to reduce their production costs.   Starting production with just a few birds to test the market cannot work as small numbers are inefficient and expensive to produce and process and inconsistent in taste and appearance.   Newsletter 65 discussed some major production cost items that are influenced significantly by volume.

Building a business plan based on export adds even more costs to meet the requirements of the importing country.