Archive for Ostrich Industry

Strategic Analysis of the Ostrich Industry

A meeting held in Pretoria in 1999 carried out a full strategic analysis of the industry the supplement to Newsletter No. 15 provided a full report.   Industry immaturity was identified as the primary cause of the problems.  As this study related to every stage of the process and delegates were from all aspects of the value chain, this can be viewed as a fair analysis.    The problems and solutions identified during this meeting remain accurate today.

All present at the strategic analysis sessions, under the guidance of 2 academic professors, were first asked to identify the problems as they saw them.   The idea was to list the problems and divide them into sectors and order of importance.  That created the “Problem Tree” as in Figure 1.  Then we discussed each problem asking the question “what action is required to overcome each of those problems?”   That enabled the construction of the “Objective Tree” as in Figure 2.

Note there are 4 major sectors with their problems and actions required listed below.

Figure 1 - Ostrich Industry Problem Tree
Problem Tree

Looking at the Problem Tree in Figure 1, it is clear why our industry was struggling.  All looking at it can identify with most of the items listed and every one of those items relates to immaturity – maybe a better word is inexperience.  Over the past 15 years many new countries have started up before any previous country has successfully transitioned to commercial production, therefore we have had ongoing inexperienced newcomers and loss of the experience gained by those let down by the lack of development.

Each one of those items has to be in place as laid out in figure 2 in order to have a sustainable market.  The buyers are there, but they can only buy when the product is produced consistently, at the right price, consistent in quality and in the adequate volume.

Figure 2 – Ostrich Industry Objective Tree
Objective Tree

The industry, for the most part, remains inexperienced.    Why is this?

The history of the industry to date is a high turnover of involvement with many around for only 3 or 4 years before failing to make money and then leaving the industry.   The result is a lack of continuity.   Figure 3 is an illustration of the cycle experienced that started in the latter part of the 1990s.

Figure 3 - Current Cycle of Ostrich Industry
history

As the early producers and processors were finding their feet in the transition an important event took place that had a major role to play in the reasons why the production problems became severe.  At this time a South African scientist achieved a PhD in ostrich nutrition and went to many countries lecturing.  A video from one of these presentations was widely distributed.  Many developing rations for ostrich used the work as the foundation of their rations.  In 1999 he wrote:  “± 80 % of the total ostrich industry is based on nutritional guidelines presented by my work”.

Figure 4 provides the comparison of the production problems and the objectives required to overcome those issues copied from Figures 1 and 2.   Proof that South Africa has failed to introduce any of the improvements in their technologies and production systems lies in the fact that they are experiencing continued export restrictions for their meat as a result of health issues within their industry.

Figure 4 - Comparative Production Problems and Objectives

problem objective production comparison

As identified, in order to deliver consistent delivery of a consistent product at commercial and profitable levels of production, it is essential to improve production efficiency and to achieve consistent good health of the livestock. Ostrich are proven to the have significant production potential, but to achieve that potential requires a totally new approach that has yet to be applied on a commercial scale.

Research May Give Ostrich Industry New Wings

This article published in January, discusses how the quality of ostrich feathers is a key indicator to healthier chicks.  Ostrich feather quality is a key indicator to health in the same manner the sheen on the coat of all livestock and pets indicate overall health.  Good Health and production potential is all down to good management with the most important element – adequate nutrients fed.

Having lived and farmed ostriches in South Africa, the problems in the South African Ostrich industry have come as little surprise.  A few quotes from the article:

Quote: research from Stellenbosch University shows that the brighter the white wing tip, the better the bird. End Quote

Quote:  The finding points the way to breeding chicks that are more resistant to disease — possibly even to the avian influenza that has severely curbed the industry, causing losses of up to R1.5bn since the European Union (EU) stopped importing raw ostrich meat. The EU used to import about 80% of South Africa’s ostrich meat. End Quote

Quote:  Stellenbosch University behavioural ecologist Maud Bonato said there is "potential" to breed birds that are more resistant to avian influenza, although proving this is difficult as "you can’t just inject birds with avian flu". End Quote

Quote:  the finding is "quite exciting, it’s quite powerful … it has significance for the breeding of chicks better able to resist disease". End Quote

The peer-reviewed published research  was reported to show Quote:   "the coloration of the father’s white feathers … (predicted the offspring’s) immune response to typical avian diseases such as diphtheria, while the coloration of both the father’s white feathers and bill predicted offspring growth rate". End Quote

Quote: The scientists also proved that ostrich hens laid heavier eggs when mated with males with brighter feathers. End Quote

Quote:  “less than 100,000 birds would be slaughtered this year, down from 250,000 birds in 2011.”

While writing this article I put “Ostrich Production” into our search engine.  This is the list of the articles it produced on just the first page. I had the option to go further – but I think this list illustrates just how low level that area of research is in comparison to the real evidence?

Optimising Genetic Performance in Ostrich Production

World Ostrich Production Statistics

Establishing Bench Mark Targets for Ostrich

Purchasing Ostrich Eggs and Chicks

Purpose of the World Ostrich Association

Guidelines to Evaluate Ostrich Bird Size and Development

The Ostrich Financial Cycle

Ostrich Growth Curve Discussion

Growth Curves of Ostrich

The Ostrich Value Pyramid

The photo below is a great bench mark illustration of how brilliant healthy ostrich feathers can look.  This is a Red Male in the US around 1995.  The farmer holding those feathers alongside the bird is 1.9m (6ft 3”).

Bird114 1

Guidelines to Evaluate Ostrich Bird Size & Development

Over the years many photos of ostrich were taken with some sent to us.  Recently there was reason to discuss the issue of how to visually judge bird development.  These illutrations were put together with several photos side by side as a single illustration. For this illustration all photos include men alongside the birds as a guide to their size.

Photos A, B and C in figure 1 are birds from the Blue Mountain benchmark weight gain trial carried out in 1996 and discussed here and here. Using the fence and the man with these birds as a guide, it is possible to see how large these chicks were at the time of weighing.  They were from good genetic origin, but good genetics still require the correct nutrients to achieve their optimum growth, health and performance.    Observing these chicks one can tell they are young by their feathers and the faces.  They were around 195 days (27 weeks) and weighed around 85kgs liveweight.

men-illustrating-size-ostrich

Figure 1: Men Illustrating the Size of Ostrich

Photo D is an illustration of a scientist in the Netherlands scanning a breeder as part of a study to understand why the breeders were not breeding well[1].   The scientist is kneeling and as you can see the bird looks very small alongside him.  Note the very tiny body size.  This study was carried out in 2002.

Photo E is a photo of some proud owners showing off their new breeders that they published on their website in 2003.  These owners were part of an investment group starting an ostrich production business in Brazil.  As new entrants to ostrich production, they had no idea that this bird was severely undersized.   The head height of the bird is hardly as high as the men – her feather colouring confirms she is a mature bird and not a chick as in photos A, B and C.

The birds in photos D and E are severely stunted in their growth – this is not simply poor genetics, it is also poor diet during the growth period.   Clearly, if a bird has failed to thrive during the development stage, their reproductive organs will not be able to develop adequately and this will impact on future production potential.

Our president Daryl Holle took a few photos of his own birds to provide bench mark guidelines to enable producers to gauge their own bird’s development.  Always remember that benchmarking is about setting a base-line to judge one’s own bird performance and aiming to improve on.  Figure 2 illustrates the measurement points and provides the figures for a fit and productive 4 year old breeding hen.

ostrich measurment points

Figure 2: Ostrich Measuring Points

Body Height
Height measurements need to be read with care…there are many tall birds with poor frames. The height must be accompanied with good depth, width and length of frame.  This hen measures 1.5m (59 inches, which is 1 inch short of 5 feet) from the ground to the highest point on her back.

Body Depth
A quality bird should have good depth.  Take the measurements from the top most part of back to the bottom of her fat pan area just behind the legs.   The measurements on this hen:  68.7cm (27 inches)

Body Length
Take the measurement from the base of the neck to the very base of the tail.  This hen measures 1.14m (45 inches) from the very base of neck to the very base of her tail.  Take the measurements from where the neck goes into the back and exactly where the tail begins to rise from the back.

Body Width
Take an imaginary line (shown in green) from outside the drum muscles and measure straight across the back.  The measurement on this hen is 66.04cm (26 inches).

Figure 3 provides a few more photographs of birds taken during the 1990s when there were some good genetics around supported by adequate nutrition.  The men in Photographs A, B and C were all around 1.9m tall (6ft 3”) and taken in the United States.  Photo D was taken in Australia.  I don’t have any information on the size of these men, but it is evident from their comparative size to the fencing that these were strong men of reasonable build and height. The bird they are handling is an 18 month old bird.

The bird in Photo A is a 16 month old Bird that Daryl Holle purchased as a 3 month old bird in the early 1990s.   Photo B is a Red Male – observe the amazing size of those feathers.  At that time Reds were believed to produce poor feathers.  This photo proves that when they have the adequate nutrition they not only are very large birds, they also can produce magnificent feathers.

ostrich size comparisons

Figure 3: Comparative Size of Ostrich - Photos taken of Domesticated Ostrich in mid 1990s

The immature feathers of the birds in Photo C illustrates how well slaughter birds can grow when fed and managed correctly.   It was this photo that first caught my attention when seeking information on work carried out outside South Africa.  At the time I was based in South Africa and aware that local farmers were seeking information.  The internet as a source for information was in its infancy.  Photo D, taken in Australia, illustrates the size of this bird.

These photos were taken at the start of the industry as it attempted to develop outside South Africa.  They provide evidence of the underlying genetics.  Achieving commercial success depends on producing birds to this standard as the starting point.

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.

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.

Food Security

Newsletter 86 - part 2

This section addressed many interesting and challenging issues focussing on the role of livestock in food security and the livelihoods of men and women living in poverty.  This is of particular interest in Ostrich production as we have witnessed a number of initiatives in Southern Africa where ostrich projects have been set up based on securing enhancement of the lives of previously disadvantaged sectors of the population.  In Namibia significant investment took place using pension fund money.  This and other projects are set up with well intentioned motives, but based on economics assuming ostrich as a producer of a high value skin rather than ostrich as an efficient supplier of quality meat protein.  As a result key production measurements such as slaughter progeny per breeder, days taken to slaughter, feed conversion statistics were ignored and genetic development rarely considered.

There are now projects under way in pig production, where proven efficient methods of production are  adapted to include the more vulnerable members of the population.  These are large scale projects, correctly funded introducing proven technology and advanced genetics.

Over the years we are approached regularly by groups in developing countries hoping to start with ostrich production projects.  The evolutionary processes the mainstream livestock species have gone through as described in this document (the FAO publication “The State of Food and Agriculture – 2009”), help explain why it is more challenging to introduce a new production specie where total world production, when measured in meat tonnage output, is no more than many single industrial pig, poultry and beef operations.

There is a discussion on the move in livestock production from pasture based systems to highly intensive systems based on by-products and concentrates.

The dominance of concentrate feeds has meant that livestock production is no longer constrained by local availability of feed and the natural resources needed to provide it.

This had led to production where the feed that is easily transportable thus driving success in agriculture exports based on their ability to produce the ingredients efficiently.  Brazil and the US are examples of this; they have also gone one step further, rearing livestock to convert that feed to low cost meat protein and exporting the meat protein. This is not a discussion on whether it is right or wrong, it is illustrating why livestock production has moved in the direction it has and discussing how it fits in with feeding the growing populations and examinaing different options to ensure sustainable and wholesome sources of food, including meat protein that is availalbe to all.

Today we live in a global village.

- It was only 500 years ago that Christopher Columbus proved the world to be round.
- Less than 140 years ago Jules Verne was writing about going around the world in 80 days
- Almost 50 years ago Yuri Gagarin orbited the world in space
- Today we can fly food to wherever it is needed

There are many reports of the significant increase in population growth over the past 50 years and forecast to continue rising, driving the need to ensure optimisation of production with minimum wastage to ensure there is sufficient food to feed all and not only the richer members of the world population.

Page 25 illustrates that 26%of the earth’s ice free land surface is grazing. These are areas unsuitable for arable agriculture, but still extremely valuable in the provision of food.  These areas can be made more productive when livestock grazing receive supplementation such as we see with sheep grazing the uplands of our Welsh mountains, for example.  This optimisation of resources has to be balanced carefully with commercial viability for those producing under these conditions.  Goats and Sheep handle these harsh conditions, but revenue for those shepherding them is low when compared to larger scale more commercial operations where containment within fenced boundaries and supplementary feeding can increase meat yields and labour input is reduced per kilo of food produced.  We still see many areas of the world with small herds tended by a single shepherd by day rather than contained in a foraged enclosure. These animals are making use of a mix of natural vegetation rather than single specie grass leys as we commonly see in intensive grassland agriculture today..  Stock herded in this way yield significantly less meat than those reared on higher quality grazing and with some supplementation.  Access to adequate water also has a significant impact on yield.  Lower yields per animal also mean greater man hours per kilo of meat recovered required to slaughter and process the animals.

Ostrich have adapted to live in some of the most arid conditions in the world, but farming them in this way is not commercially viable as a producer of meat.  Produced in this way it is unlikely that ostrich will contribute to “food security” or to “lifting those looking after them out of poverty”.  The ability of ostrich to survive under these extreme conditions has enabled them to survive as a species.

There are good discussions, with examples, on private sector projects linking backyard poultry systems as a solution to including small farmers but with the benefits of scale and management structure.  The problems and solutions cover many of the aspects that we discussed here and here reporting on a project in South Africa.

The uniqueness of ostrich is the knowledge learned over the past couple of decades.  We have learned that when farmed commercially incorporating modern techniques under ethical conditions they have the potential to produce red meat at comparative costs to those pig and poultry producers currently achieve.  This is of particular benefit to those members of populations unable to consume pork meat.  As multiple reproducers, it is possible to rapidly improve the genetic base in a similar manner that has been achieved with pigs and poultry.

Defining Volume

Newsletter No. 75 - Item 2

What do we understand by “volume” in today’s markets?   When discussing volume with two managers of a pig unit we calculated the annual tonnage of pig meat they produced on their 200 hectare farm.  The farm was a closed production unit, so included boars, breeding sows and rearing all production to slaughter.  The farm had their own feed mill, with the slaughter pigs shipped to the owner company’s slaughter plant.  They bought in all their feed ingredients.  Their total annual meat tonnage from their pigs shipped from that farm related to the total annual volume of ostrich meat from all South African production.

To quantify this in numbers of slaughter Ostrich, in 2004, South Africa slaughtered 208,000 ostrich.  At 25kgs meat per bird, average South African meat yield, this relates to 5,200 tonnes of meat per annum.  Reared under improved production systems, ostrich have the ability to produce in excess of 40kgs of meat per bird.  That improvement relates to annual tonnage of 8,320 tonnes from the same number of slaughter birds, an increase of more than 3,000 tonnes – 60%.

You will note that Farmer 3 here mentioned working for a multi-national large poultry operation.  Once we explained the volume issue, with his background the writer understood the challenges.

Domestication of Livestock

Newsletter No. 51 - Item 1

Wildlife resources: a global account of economic use [1] is a book published in 1996.  The aim of the book is to discuss the use of wildlife resources, both from a domestication view point and from a conservation viewpoint.

They discuss the development of domestication of certain species, setting out 4 stages.

  • Stage I – kept captive without or with occasional breeding
  • Stage II – kept captive with breeding, beginning genetic isolation
  • Stage III – kept captive or herded, selective breeding, full genetic isolation, semi-domestication
  • Stage IV – fully domesticated, docile, genetical changes, breeds

When viewing the table one can see that Ostrich is classed as Stage II put at 1860 and the longest Stage IV species starting the process of domestication as long ago as before 7,000BC.

Wild animal species commercially utilised by captive keeping, taming controlled breeding or domestication

Wild animal species commercially utilised by captive keeping, taming controlled breeding or domestication

[Click here for larger image]

These are the full text descriptions of the different stages:

Stage I:  The particular species is kept captive in small numbers with or without breeding.  This may occur by herding small groups close to man, leaving them to roam freely during the day-time but restricting them by night to simple protective enclosures.  Although some breeding may occur during this state, the captive stock requires regular replenishment from the wild and genetic material is still introduced regularly from the reproductive pool of the wild species.  

Stage II: The next step in the process of domestication is that the physically contained animals start breeding regularly under the care and supervision of man.  As numbers of captive bred or herded individuals increase, interchange of genetic material with animals of the wild population diminishes.  Such breeding might go on for many generations without any intentional selection by man. 

Stage III:  By this stage the captive animal stock has become genetically isolated from the wild population.  Selective breeding at this stage may either be deemed unnecessary or is very limited, for example to produce certain colorphases in furbearing animals.  Even without selective breeding, such animal stock will gradually undergo morphological, physiological and behavioural changes merely due to the different environmental circumstances.

Stage IV:  Full domestication is achieved only by long-term controlled breeding with total isolation from the wild species and the application of varying degrees of husbandry.  This results in a close relationship, even interdependency, between the particular animal species and its master.  Selective breeding and husbandry aim at the promotion of distinct anatomical physiological characteristics culminating in the formation of different breeds.

Depending on the duration and severity of the selection process, one may distinguish between “domesticated” and “domestic” animals.  The former are referred to as “primitive” domestic animals, externally still resembling the progenitor species and behaving like them.  Only the latter are truly “man-made” animals which associate freely with man and might bear little resemblance the progenitor species.

Page 13 discusses how domestication has continued developing.  As illustrations the authors cited crocodile having moved from Stage I to Stage II, moving from collecting eggs from the wild to an increasing number of farms in recent years and Ostrich farming reaching Stage III in South Africa about 50 years ago.  The interesting aspect here is subsequently when farming opened up to the rest of the world, because export of genetic material was illegal in South Africa, the early stock was collected from the wild.  This happened in a controlled manner from Zimbabwe, Tanzania and Kenya with some early shipments illegally captured from wild South African stock.  Since there has been no meaningful genetic development as yet, with limited domesticated breeding stock left, it could be argued that the Ostrich Industry outside South Africa remains at Stage II.

It is possible to move to Stage IV over a few generations once commercial production commences on an industrial scale.

----

 [1] Roth, Harald H., and Gu?nter Merz. 1996. Wildlife resources: a global account of economic use. Berlin: Springer Verlag.

Meat Supply Chain

Newsletter No. 67 - Item 3

Figure 1 is taken from a slide 18 in a presentation by Rabobank at the World Meat Congress of 2008. The presentation is no longer available on line.  This presentation discussed the impact of biodiesel on the ruminant livestock sector. The graphic is simplistic, yet illustrates well the processes from farm to plate.

meat supply chain

Figure 1 - meat supply chain [Source: Rabobank International]

Understanding the many factors that influence the price of our products is an important issue to the success of any business. Slide 5 (see Figure 2) of the same presentation by Rabobank included an excellent illustration quantifying the different factors that impact on commodity prices.

Figure 2 - Factors influencing agricultural commodity prices

Figure 2 - Factors influencing agricultural commodity prices

Click here to view enlarged version

World Ostrich Production Statistics

Newsletter No. 61 - Item 3

Newsletter No. 19 included a table summarising production from 1993, the last year before deregulation of the industry in South Africa to 2004, when it was becoming clear that the industry in South Africa was moving into decline. Some figures have subsequently been updated as the 2004 figures were estimates and reflected now in Table 1.

61-ostrich-production-table

Table 1 - World Ostrich Production Figures

The figures illustrate that South Africa is returning to the 1993 levels with no stability in the other regions and Namibia and Israel no longer in production. Namibia’s facilities were built to support 95,000 slaughter birds, but never achieved greater than 30,000. Figure 1 demonstrates not only the variability from year to year in total production, but also the variability of each area from year to year. It illustrates the lack of consistency. It is important to note that Brazil reports 100,000 birds slaughtered in 2007, but this was not driven by a huge increase in demand, but rather most farmers leaving the industry, with slaughter including many breeder birds.

Ostrich Meat Tonnage

Figure 1:  Comparative Ostrich Meat Tonnage by Country (table 1)

Further points to note in Figure 1:

The peak is 14,000 tonnes of meat total global production per annum. To put this volume into perspective:

  • Production spread between many countries
  • Within each country, including South Africa, there are a number of different plants slaughtering the birds
  • A pig slaughter plant very close to where I live slaughters 10,000 pigs/day

10,000 pigs/day is equivalent to:

  • 700 tonnes meat per day (output from a 500 sow unit)
  • 20 days slaughter for this single plant is total annual tonnage of Global Ostrich slaughter in 2002
  • Less than 10 days at current Ostrich production levels

Costs at every stage – production, processing, distribution and marketing – are high when operating in low volume. It is not possible to achieve economies of scale on these low production figures. To achieve genetic improvement programs requires high volume. It requires high volume for support services to invest and develop other technical services required to support an industry.

------

Note 1
Asia: All Asian countries, including China, Japan, Indonesia and Malaysia
Australasia: Australia and New Zealand
Bophuthatswana: The independent homeland of South Africa that became part of South Africa once more with the New South Africa
Europe: For full list see: http://www.world-ostrich.org/member/news57sup.htm#15
Middle East: Includes the whole region.
Namibia: Namibia only
North America: Canada, USA, Mexico and all countries North of the Panama Canal.
South Africa: South Africa only
Southern Africa: Zimbabwe and Botswana
South America: All countries South of the Panama Canal.
Other: Any not included in the above

Note 2:
Figures as published in "The Report on the Effects of Deregulation of the South African Ostrich Industry" -  Page 27

Note 3:
"The Global Industry, Current Situation" - Fiona Benson. Presented to the World Congress, Portugal, 1999 -

Note 4:
Figures as published in "The Report on the Effects of Deregulation of the South African Ostrich Industry" - Page 37

Note 5:
Estimates from current information.
The only way to achieve more accurate information is for members to set up systems in their own countries to be able to report meaningful results.