Archive for Ostrich Economics

Ostrich Financial Cycle

The World Ostrich Association was formed in September, 2002.  The 100th edition of the newsletter was first published in July 2011.  It reported, with regret, that the industry continued to witness slow development in production when demand for our products remains strong.   It reported how over the years the newsletters have discussed many of the reasons for this.

The saying "No Production No Industry" is proving to be so true - a statement made by a speaker more than a decade ago by an MD of a South African tannery who was working hard to build a market....and frustrated by the unreliability of production.  The production on farm has to be in place, efficiently producing sufficient number of birds to provide a regular, consistent supply to the markets.

The illustration below is a simplistic illustration that clearly shows the interdependency of all activities in the production chain and the importance of ensuring end markets.  The relevance of this is that all too often ostrich farming was introduced to a new country, too much focus was placed on selling offspring to new farmers - rather than developing the full infrastructure to ensure slaughter and marketing of the products of ostrich were in place.  This resulted in no continuity of sales revenue entering the industry generating profits available for each sector to re-invest at every step of the way to support further production.

Ostrich Financial Cycle

Ostrich Finacial Cycle

Where sales have developed, the standards of farming were too poor to maintain consistency of supply of slaughter birds and therefore the supply of product.  This is especially evident in South Africa where volume was not the issue further proving that whilst production standards remain poor on farm, it is impossible to produce the commercially viable birds and a sustainable supply of product to the markets.

Understanding the causes for the poor production remains the first step to putting in place the solutions to satisfy the market's interest in our products.

Farmer Slaughter Bird Payment Systems

When a farmer is selling to a processor it is essential that the payment structure rewards quality birds and penalises poor quality birds with minimal meat yield as the cost of processing these poor quality birds are significantly higher.  Poor quality, low yielding birds, all too often, also have poorer quality skins and feathers. The following are descriptions of the different payment methods that are or have been used over the years.

Slaughter Bird – based on live or deadweight:
The farmer is paid a price per bird, usually based on liveweight.  Over the years this has proved unsuccessful.  Currently liveweight is a poor guide to meat yield or quality of that meat.  Some birds carry an extensive amount of fat and others little or no fat. Genetics are also extremely variable at this time.  As the ostrich skin is paid on a grading system, there is no way to assess the quality of that skin while the bird is alive.  This method of farmer payment does not reward the quality bird adequately to encourage or support production of high yielding birds producing quality meat and skin.

All other payment systems currently used separate the payment of the skin and the carcass for assessing the total value of the farmer payment.   The skin may be retained by the farmer to sell directly or the slaughter facility will pay the farmer directly.   In some slaughter facilities where volume is sufficient, the feathers will be valued independently, but usually they are included in the price paid to the farmer for the carcass and meat.  While volumes are low, the market opportunities for the feathers are low in relation to the handling costs.

Carcass weight:   WOA Ostrich Benchmark Production Targets provides the definition of a carcass.

Payment by carcass weight maybe a set amount at the same weight per kilo for all birds, or it may be split into different weight classifications for a tiered payment structure.  The latter is preferable as it is much fairer to the good farmer.  It also encourages production of birds carrying higher meat yields, which are cheaper to process and return more revenue as illustrated in Figure 1.

77_processing_cost_br

Figure 2: Comparative Processing Costs relating to Meat Yield [Newsletter 77]

Boneless meat yield:  WOA Meat Yield Classifications provides the WOA standards.  This payment is based on the weight of the saleable meat removed from the carcass.  If offered payment in this way, the producer should ensure there is a very clear definition of all that is included and how it is calculated.  Payment on boneless meat yield basis will also have a weight classification system to enable a tiered payment structure to pay according to the yield class.

This tiered payment structure passes on savings made in the processing back to the farmer as he produced a better quality bird.  Figure 1 illustrated the savings in processing costs when valued on a per kilo basis.  Figure 2 illustrates comparative carcasses, illustrating different weights.

comparative carcasses

Figure 2: Comparative Carcasses

Figure 2 illustrates 2 carcasses.  The left hand carcass yielded 38% more meat, therefore 38% increased meat revenue and will have cost the same to slaughter and process.

Apart from weight the other difference in these birds is the days they took to reach this stage.  Clearly the increased yield was achieved as the bird was fed for 60 more days and that adds additional costs for the producer.  Another good reason for paying an increased price to represent the savings made on the kilo processing costs.

Carcass Grade:  The WOA Carcass Grading System provides definitions for the different grades in addition to payment structure based on yield classification, carcasses should be graded for quality. Grading will consider Bird Age, Fat Colour, Muscle Colouration, Heart Condition, Liver Condition, Presence of any Disease and any other condition that is not acceptable – such as bruising.  Carcass grade can be applied to any of the above payment systems.  This also helps differentiate the age of the birds to ensure older birds are not slipped into a batch of slaughter birds.

This discussion relates to payment systems for payments to the producer of birds by buyers of slaughter birds to encourage the production of better quality birds.   Many of the South African slaughter plants were owned by the producers.  These test birds were slaughtered in such a slaughter plant.  Whilst the managers the farmer’s employed to slaughter and market their birds could see these benefits, the challenge was the getting the farmers to understand the benefits and how they could achieve the improved production.

How do Buyers of Slaughter Birds verify the Age of Birds?
The answer to this question currently is very simple. The supplying farm must have verifiable records that record the date of hatch.

Ostrich do change their feathers at particular stages of growth. The diet the birds are fed and the management of the birds influence the stages of growth and these can be extremely variable.

In the mid 1990s some South African scientists produced data based on bone development as a means of verifying the age of birds. However bone development is also diet dependent, so is not a reliable method to determine bird age accurately without comparative studies.

Body Condition Scoring

Body condition is a visual and subjective assessment which comes naturally to stockmen/women. Good body condition is achieved by a combination of the nutritional program, management and the environment. With ostrich, there remains a lack of experience on how to fully recognise a healthy body condition.

The subject of Body Condition Scoring (BSC) was referenced in Ostrich at a conference in Hengelo in 1996 or 1997.  Whilst body condition scoring is an excellent guide, the problem at the time was that experience in ostrich was still limited and therefore it was not possible to set any meaningful standards.

Breeder condition will change during the breeder season.  The aim of the off season is to rebuild their body reserves so they start the breeder season in top condition.   Figure 1 is an illustration of body condition scoring for Dairy Cattle.  These illustrations are taken from Pennsylvania State University web page, but there are many examples available.

Dairy cattle BSC

Figure 1: Dairy Cattle Body Condition Scoring

Figure 2 is a similar photo of comparative ostrich hens.  Comparing these two hens, it is clear which bird will have the resources to withstand a productive breeder season.  The hen on the left was fed a ration that was mainly grain based, with limited vitamins and minerals and some straw.  The hen on the right received rations that are of high nutrient value that included alfalfa, maize, soyameal with high levels of supplemented vitamins and minerals.

comparative ostrich hens

Figure 2: Comparative Ostrich Hens

The condition of ostrich of any age should be evaluated using the normal criteria of judging good health of which body condition is just one component. It is important to understand the difference in a bird in good condition with plenty of muscle as opposed to a bird that is carrying too much fat.  Signs to look for with ostrich are such as things as:

  • General Alertness:  At all ages the birds should look bright and alert.  Ostrich are extremely good at camouflaging poor health so as not to alert predators.
  • Bright Eyes
  • Good Health
  • Glossy Feathers
  • Good feather Cover:  Free from feather pecking but some mating wear is normal during the breeding season
  • Rounded well-muscled body
  • Well-muscled thighs
  • Strong legs
  • Freedom from any defects: e.g: bowed legs, twisted legs
  • Good appetite

    quality chicks

    Figure 3: Quality Chicks

Apart from visual inspection, the way to physically assess the body condition of ostrich:

Quote: When the backbone at the highest place on the bird’s back is protruding above the surrounding flesh, the bird is too thin. When the backbone at the highest place on the bird’s back is indented below the surrounding flesh, the bird is too fat and needs decreased feed—or a different feed formulation.  The optimum Body Condition is when the backbone at the highest point on their back is perfectly even with the surrounding flesh End Quote [1]

---------

[1] Daryl Holle Body Condition is Most Important

Genetic Improvement by Natural Selection

Over the years the WOA directors have emphasised the important role of improving the genetic stock as one of the management factors to achieving improved commercial levels of production.  Recently we received a comment that those interested in ostrich farming should shy away from such terms as "genetic improvement programs".   The reason put forward was fear that our consumers may believe we are going down the same track as companies such as Monsanto with their approach to genetic modification (GM).

In the current environment of increasing consumer concerns of GM it is important to be very clear about how the modern GM technology is so very different to “genetic selection by natural selection”.   For millenniums agriculture has improved farm output with farmers selecting seeds from their best crops and selecting breeding males and females from their best livestock genetic lines.  This process has improved agricultural production since the start of agriculture some 10,000 years ago.   As discussed here genetic selection this way has also changed the confirmation of breeds to meet the modern market demands.  Figure 1, from that newsletter illustrates how the Aberdeen Angus has changed from 1959 to 2006.

In livestock genetic improvement by natural selection is achieved by selecting the animals demonstrating the best traits for their breed, or specie, to use for future breeders to improve the breed for their productive traits.  In ostrich these productive traits may be egg laying, they may be specific conformation that provides optimum muscle size for meat production; they will include optimum growth size and feed conversion. In the wild it is the survival of the fittest.

With plants this natural method of genetic improvement is achieved by saving seeds from the best crops to produce a quality crop with optimum yield under the local climatic conditions.

Genetic improvement by natural selection introduces only the genes from the same species, they may be crossed with different breeds or varieties of the same species but they do not introduce genes from different species.  For example in cattle you may cross a Fresian Dairy Cow with a Hereford to achieve a calf that will yield more meat when no further heifers are required to replace older members of the herd.

In recent years something new has crept into genetic development that is alien to genetic improvement by natural selection.  That is genetic engineering where DNA from different species is impregnated into a plant or animals.  The simplest definition of a genetically modified organism is one in which the genetic make-up has been altered in a way that does not happen naturally. The genes, DNA have crossed the specie barrier.

An example of Genetic Modification is taking the gene that programs poison in the tail of a scorpion, and combining it with a cabbage.  These genetically modified cabbages kill caterpillars because they have learned to grow scorpion poison (insecticide) in their sap.  Another example is the gene from a fish that lives in very cold seas has been inserted into a strawberry, allowing the fruit to be frost-tolerant. The item with the greatest concern is the impregnation of DNA into crops such as soya and maize to make it resistant to the herbicide roundup.

The two types of genetic improvement must never be confused.  Genetic improvement by natural selection is normal and essential in commercial agriculture and quite natural so long as the traits selected for and developed do not compromise the animal’s health and well-being.  The controversy on the safety and ethics of genetic improvement is the Genetic Engineering/modification introduction of genes from different species as many scientists still question their long term safety.

An excellent video “The World According to Monsanto” put together by Marie-Monique Robin examines the science supporting the evidence of the safety of GM crops and their development.   At minutes 47.44, during a discussion with Steve Druker reviewing FDA documentation highlighted this statement written by Dr. Louis J Prybal from the FDA Microbiology department:

“there is a profound difference between the types of unexpected effects from traditional breeding and genetic engineering”

The commercial success of ostrich farming depends on identifying the productive genetic material and developing those bloodlines using natural selection and breeding techniques, which can include Artificial Insemination.   There is no need or place for GM technology in ostrich genetic improvement.

The Five Freedoms

The Veterinary Health Plan discussed earlier introduced the Five Freedoms as an important component of the plan.  As a reminder the Five Freedoms are the same across all species and are:

  • Freedom from hunger and thirst - By ready access to fresh water and a diet to maintain full health and vigour
  • Freedom from discomfort - By providing an appropriate environment including shelter and a comfortable resting area
  • Freedom from pain, injury or disease - By prevention or rapid diagnosis and treatment
  • Freedom to express normal behaviour - By providing sufficient space, proper facilities and company of the animal’s own kind
  • Freedom from fear and distress - By ensuring conditions and care which avoid mental suffering

The first freedom references hunger and thirst.  Achieving the correct diet for ostrich continues to cause many problems and of course, has a significant influence on ensuring the third freedom is met – Freedom from Pain, Injury and Disease.   We still witness mal-nutrition in ostrich, not from wilful neglect, but rather from lack of knowledge.   Figure 1 are examples of the results of inadequate breeder nutrition.   The chicks in the first photo were all hatched on the same day, some developed well others failed to live and there were some who were slow to grow.  The chick in the middle is one that failed to live.  These chicks had bright yellow livers and yolk sacs containing no bile to aid the absorption of the nutrients in the yolk sac.  The third chick was shown to me by a concerned owner as they had purchased breeders that were fed grass only during the off season.  All chicks from those hens failed to thrive.

Various chick problems

Figure 1:  Various Chick Problems

The chicks in the photos below are an all too familiar problem witnessed in ostrich production.  The causes are nutrient deficiencies which are usually caused by deficiencies in the rations fed to the growing chicks.  These can be made worse if they were weaker chicks at hatch due to breeder rations that are lacking in adequate nutrients.

growing chicks with leg problems

Figure 2: Growing Chicks with Leg Problems

All these problems are preventable when the birds have sufficient feed containing the right balance of nutrients and, as can be seen, that starts with the breeders to ensure strong chicks at hatch.  Healthy chicks at hatch grow quickly and reach slaughter weight at much younger ages than was traditionally achieved. 

Ostrich Growth Curve Discussion

Recently we discussed comparative growth curves published for ostrich and how they illustrate a lack of will to investigate reasons for potential to improve current performance.   When viewed in the backdrop of the Klein Karoo Kooperasie (KKK) wishing to contain production the maintain skins at a high value, the reason becomes clearer.

So was it incompetence by those scientists discussed who reduced the Gompertz growth curve expectations?   The following information can enable readers to draw their own conclusions.  The following are excerpts from internal reports published by The First National Bank of South Africa (FNB).  They were investigations into the industry carried out in 1990, 1993 and 1995 to assess the impact of deregulation on the industry.  Remember that until November 1994 farmers' could only supply the KKK and only the KKK could market ostrich products by law in South Africa.

3 excerpts - one from each report:

FNB Report 1990

FNB Report 1990

FNB Report 1993

FNB Report 1993

FNB Report 1995

FNB Report 1995

Since those reports were published the KKK has changed from a co-operative to a corporation trading under a number of different names best known today as the Klein Karoo Group of Companies.

 

Growth Curves of Ostrich

This question was recently received:

So far I have been using standard growth curve of ostrich from the data of Cilliers and Van Schalkwyk, 1994.   If you have any better standard ostrich growth curve, please let me know.

We pointed the nutritionist in the direction of this paper “Potential Meat Yield of Ostrich”.   The question emphasises the need to keep reinforcing the message that paper discussed as it is key to understanding what is required for the commercial success of ostrich production.

During the early and mid 1990s work was carried out by a few people to understand the growth curve of ostrich.  When examining the evidence during the research for that paper, there is one paper of concern.  The paper was presented at the 1996 European Ostrich Conference, co–written by a number of the scientists from Stellenbosch University entitled:  “Nutrition of the Ostrich for Meat and Leather.”    The reason for the concern is a discussion on reducing the potential rather than asking searching questions “if current production was not achieving that potential, what was required to achieve that potential”?

The aim in commercial livestock production is to enable the animal to achieve commercial slaughter weights as quickly as possible whilst maintaining optimum health and providing products the customer wants to buy.  Of course it also necessary to achieve this at a price the consumer can afford and the farmer and processor can make a fair profit.   The following graphic is taken from the paper "The Potential Meat Yield of Osrich".

96-weight-gain

The following are details of the different growth curves:

1. Gompertz A:

This is the abstract taken from a paper published in 1991 and available on line here:

"The Gompertz equation was used to compute growth curves for three groups of ostriches (Struthio camelus), from Oudtshoorn in South Africa, the Namib desert in Namibia and from Zimbabwe. All were reared under typical intensive farm conditions with ad libitum feeding. There were no significant differences in mature mass between regions but the maximum daily weight gain for males occurred later (day 163) for Oudtshoorn birds, compared with day 121 for Namibian and day 92 for Zimbabwean. Oudtshoorn females reached maximum rate of gain on day 175 compared with day 115 for Namibian and day 114 for Zimbabwean. Comparisons might prove important when planning programmes for the genetic improvement of commercial flocks, but possible influences of food composition and environment should be investigated."

2. Degan

At the 1996 European conference there was another paper that reported growth results from a trial carried out in Israel using turkey rations.  When comparing these results one can see that they achieved improved growth rates over the reduced targets set by these scientists from Stellenbosch [4].

3. Blue Mountain Farmer Bench Mark Study

The full details of this study are available here.

When reviewing all data then available one has to include the Blue Mountain Farmer weight gain benchmark recordings.  As a farmer the major aspect that set this data apart was the fact that the information was published monthly as the birds were recorded.  It was presented in such a fashion that the outcome was clearly known; it was an exercise to simply record the data for other’s to see and carried out to enable farmers to have sound benchmark figures.

4. Gompertz B

The paper “Nutrition of the Ostrich for Meat and Leather” referenced above, suggested that the estimated growth rates as determined in 1991 may not be possible, so reduced the targets to the levels illustrated in this curve..

Summary

After plotting all the published date – the message they tell is compelling. One as to question just why one would downgrade that Gompertz A to a level lower than results published by birds fed on rations designed for a totally different species?   Why did the scientists not ask the question “what is required to achieve the estimated potential of ostrich"?

South Africa Avian Flu Update

Over the past few years the South African Ostrich Industry has experienced a number of outbreaks of Avian Influenza in ostrich which has blocked their ability to export ostrich meat, fertile eggs and livestock.  Over the years of our newsletters, we have updated readers with the current situation.

On 25th July, 2013 the veterinary services submitted their "resolved" report to The OIE for the outbreak that started in February, 2011. We have first reports for export certificates for fertile eggs but still require confirmation of any being granted.

Any member who has had success, please add a comment.  Any non-member, please email our admin to let us know to enable us to inform members and others readers.

The Ostrich Value Pyramid

Newsletter No. 95 Item 3

A speaker from the Klein Karoo Kooperasie (KKK) discussed a value pyramid during a presentation at The International Industry Strategic Analysis held in 1999 and reported here.  The speaker was suggesting that it was important to keep the price of the product high using DeBeers as an example in the way they maintained the high value of diamonds.  They achieved this by very strict control of the supply of product to the consumer.  Subsequently they have discovered this does not work so well for ostrich as it is not so easy to switch production on and off with livestock and retain profitability in a similar manner.

In this case discussion related to the value of the skins as the KKK's vision was limited as to the full profit potential of ostrich viewing the meat as of little value and only a by product.  The fear was witnessing ostrich become a high volume, industrial meat production industry where the meat and skins would become commodities and thus low in value.  Which business model creates real value, sustainable employment and the ability to growth the business?

The illustration below is a value pyramid as it can apply to ostrich and other agricultural products. The area in blue in the pyramid illustrates the value Pyramid as presented by the KKK. It illustrates the high value achieved when volume is low and how value reduces when volumes increase. At the bottom end products are sold as a commodity where any competitor can undercut prices.

ost-value_pyramid

Ostrich Value Pyramid

To increase volume whilst maintaining value is achieved through product differentiation utilising methods to encourage buyers to come to you rather than a competitor.  The areas in green represent examples of some ways to add value.

Bygholm Sieve and Food Particle Size

This article discussed Food Particle Size and the use of the Bygholm Sieve as a tool to evaluate the accuracy of the particle size.   The importance of particle size is as important with ostrich production as it is with pig farming, though the particle sizes will be a little different. This article discusses an Essex pig farmer who mills his feed on farm.

This farmer had noticed increased restlessness, aggression and tail biting among his finishing pigs when a particular variety of wheat was included in the diets. By using the Bygholm Sieve they found that although a particular wheat variety produced a similar particle size to other wheat varieties, it was stickier. After removing the 'sticky' wheat from the feed, no further problems were seen.

Later they used the Bygholm Sieve to analyse other grains. They found that 10 per cent of the rapeseed meal sampled was too coarse because some of the fine material had stuck together and formed clusters. They also found that the unmilled soya (HiPro) showed similar results with up to 10 per cent of the product being too coarse to be digested effectively by pigs.

A quote from the farmer:  “We spend so much money on feeding our pigs, so why not put a little effort into analysing the feed for optimal efficiency?”

This page describes the Bygholm Seive.  This example illustrates clearly the degree of detailed management incorporated by the pig industry to optimise their feed performance and feed conversion.  It illustrates how the best stay in a business that has become extremely competitive operating on very tight margins.  The above graphic illustrates how the price of pigmeat over the years has reduced despite the ever increasing costs.  It is attention to every detail that is a key to successful meat production on the farm.