Archive for Ostrich Industry

South African Avian Influenza

A new case of avian influenza was reported this week (April 2013) in South Africa.   To put this outbreak into context it maybe helpful to provide a reminder of the situation over the past couple of years as it has had a major impact on all working to build their business based on ostrich, no matter where they are positioned in the supply/value chain.

Avian Influenza resulted in the South African Ostrich Industry closing their borders to exports of their meat, eggs, chicks and live birds in April 2011, when H5N2 was first identified as officially reported to the OIE (World Organisation for Animal Health) here.  Over the months since then, their veterinary services have filed 13 follow up reports with the last filed in October 2012.

In February 2012 an intitial report for an outbreak of H7N1 was filed - that report is available here with no follow up reports yet filed.   This is the strain reported in the media this week as found on one farm.  To date the follow up report relating to this new outbreak is not yet filed with the OIE as it is early days.

The May 2012 newsletter reported on how the South African ostrich industry were overcoming the export ban on raw meat to Europe by developing heat treated meat as the ban relates to raw meat only.  The press reports state that provided the meat is pre-cooked for 3 seconds at 70 degrees centigrade, it is stated as acceptable for export.  They report that whilst the price is lower than raw meat, the products ensure uninterrupted exports.

The continuation of Avian Influenza in their flock however, does delay the ability for export of eggs, chicks and breeder birds thus opening up opportunities for all with ostrich outside South Africa.

Size of Ostrich Meat Market

Newsletter No. 57 - Items 2 - 3

This newsletter contained signficant data on meat consumption in all regions to illustrate the market potential for ostrich meat and attempt to answer the question "what is the size of the ostrich meat market?"

World Meat Consumption Data

The FAO have been updating their database system and providing improved data, with a greater breakdown of the alternative meats, the market that Ostrich are sold into when doing a request for consumption of all meat.  Previously we had Bovine, Pigs, Sheep and Goat, Poultry and other meats.  Today, Turkey and Chicken meat have separate categories.  Duck, Goose and Guinea Fowl also have their own separate category. Ostrich, because of the low levels of production, currently fall into ‘Other meats’, not elsewhere classified (inc. Camel and game).

We are continually asked about the size of our markets.   Therefore this month’s newsletter will focus on publishing the data with further discussion on how to establish the size of the market.  I have downloaded some of the most relevant consumption data and graphed it for easy analyses.  I have printed them in a pdf document and can be viewed here.  That document formed a supplement to this newsletter. The statistics are not direct comparisons to those published in earlier newsletters as the format in which they are now presented and the country groupings have changed with the new database.

Market Size

There are two aspects when discussing market size.

a.         Existing Market
The ostrich meat has been available for sale for no more than 15 years, with limited production and sales slow to develop as a result of such things as :

  • Low volume
  • Inconsistent quality
  • Inconsistent supply
    • Aggravated by interrupted exports from South Africa as a result of Avian Influenza, Newcastle Disease and Congo Fever
  • Fragmented supply
  • Limited marketing

b.         Potential Market
Understanding the potential market should be the area of focus in order to develop a sustainable industry, provided there is production to support the development and the meat produced to an acceptable quality, consistently supplied and at the right price.

Figure 1 confirms the continual rapid growth of meat consumption that continues to be driven by increasing wealth in developing countries.  The total meat market (excluding fish) has grown from in excess of 150 million tonnes in 1990 to 240 million tonnes in 2005.  That is a growth rate of almost 60% in 15 years, thus confirming the predictions of significant growth in meat consumption.

World Meat Consumption

Figure 1 - Size of Ostrich Market

The consumption of all other meats Rabbit, Equine, “Duck Goose and Guinea Fowl” and “Meat Not Elsewhere Classified (including camel and game)” - as illustrated in Figure 1 - is a very small percentage of the total consumption.  The major reason for this is the lack of efficiencies in production of those species that make up that group.  However, it is still a group showing rapid growth, moving from just short of 8 million tonnes to in excess of 13 million tonnes over 15 years (Figure 2).

meat consumption by region

Figure 2 - Meat Consumption by Region

Figure 2 illustrates the regional distribution of consumption of other meats.   A PDF supplement to this newsletter contains a number of graphics as detailed in Table 1.   We are a World Association, therefore it is important to reflect the variations in consumption by region as our markets are all different.  Slide 6 illustrates the consumption of other meats in the different regions and, when studied, readers will be amazed at the significant variations from region to region.   No two regions are the same.


Table 1 - Supplement Index

So what is the size of the potential size of the market?  To capture just 1% of the world 2005 alternative meat market requires nearly 3m slaughter ostriches/annum.

What is the size of your market potential?

The answer to that question depends on a number of factors - such as:

  • Location
    • Local Market
    • Export market
      • If export market, which market and can you meet the protocols required
  • Identifying your target market
    • Red meat market
    • Low fat meat
    • Cheap meat – commodity market
      • Buyers on open market with limited (if any) supplier loyalty
      • Low price
    • Exclusive Meat – low supply seeking product differentiation
      • Seeking specialty product
      • Recognises need to pay premium price
      • Requires confirmed consistency of supply
  • Production costs
    • Influence selling price required for profitability
  • Ability to supply consistently
    • With Ostrich this requires production systems that ensure:
    • Consistent egg laying
    • Consistent hatchability
    • Minimal mortality
    • Consistent days to slaughter required to achieve meat yields
  • Quality of product for target market
  • Selling price sufficient to sustain consistent supply

Understanding fully the controlling influences of that final point is the key to progressing this industry and to date remains the barrier to progress.

Marketing Starts on the Farm

Newsletter No. 52 - Item 2

This statement “Ethical food store opens with £12 ostrich eggs” was the headline of a link published in this newsletter.  The link is no longer active, but discussed the Wholefoods Store that had recently opened their first store in England.  I went onto report: 

When I visited the store last weekend (June 2007) there were no ostrich eggs and Rhea eggs were £25.00.  The Rhea eggs were yellow in colour, instead of a good off-white colour.

This particular store’s marketing differentiation is their very high standards of animal welfare and all produce free from the many negatives that have increasingly become associated with food production in recent years.  Their standards demonstrate clearly how food marketing today starts on the farm and is a partnership from the farm to the plate.    Readers can view those welfare standards here.

GlobalGAP is a global standards certification scheme that many major buyers utilise. Newsletters 10, 23 and 42 have discussed the importance of quality marks and introduction of best practice.

One problem with ostrich production is that many become involved with no vision for the market.  Producing meat and placing it in store with the hope of finding a market later is unlikely to work in today’s market place because, as can be seen with the increasing use of accreditation and quality standard schemes, you need your market established first.  You need to know  your market demands and then produce to the standards they require.  This is more challenging with Ostrich, as it is a new market in every country, with many buyers interested, but little understanding of the product.

March 2013:  Wholefoods published the following press release "Whole Foods (WFM) Plans to Label All Products Disclosing GMOs by 2018" earlier this month.  It will take them that long to establish the full reliable supply chain where they have total control in the volumes they require and able to guarantee their products as free from GM ingredients.  This move is driven by consumer demand to enable them to make informed choices about the food they consume.  This move further illustrats of how "marketing starts on the farm".

Principles of Production Agriculture

Newsletter 48

Newsletter No. 47 included reports from South Africa, United States, Australia, Israel, Turkey.  Newsletter No 48  included a short report from Australia and New Zealand that referenced production dropping significantly over the past few years listing a few reasons.  The following is an analysis and discussion on those reports.

Analysis and discussion
The report from Australia and NewZealand identified 3 major issues as a cause, but all 3 interrelate and are interdependent on each other.

a)  lack of ‘production agriculture’ principals
b)  lack of consistent quality produced
c)  lack of consistent markets

Consistent markets are dependent on a consistent supply and products of marketable quality and consistent quality.  That all starts with the farm production methods.

The ostrich industry produces extremely variable muscles sizes, meat colour and unreliable supplies.  Pig, Poultry and Beef production has become extremely efficient over the past few decades, with producers able to provide the markets with the products they demand.  That is in contrast to producing the products and then expecting the market to take it regardless.

To put this statement into perspective, the author commented that "Just last week I received communication from a producer in his third or fourth season.  He was concerned because he has a market for his produce, but his hens are not laying eggs".  The markets are there once the industry addresses the management issues required to achieve consistent production.  Are You Setting Your Goals High Enough discussed this very topic.

Principles of “Production Agriculture”
The report referenced the need to adapt to “production agriculture” principles as this is essential to achieve the consistent markets, product quality and supply cost effectively.  There is a need to learn from the mainstream industries and adapt the principles to ostrich.  A number of years ago I attended an international conference where a nutritionist’s opening statement was:

Your ostrich breeders consume nearly one tonne of feed every year - that is a lot of feed - you need to ensure it is cheap.

In contrast I made the statement also as a speaker on Ostrich nutrition:

Given their production potential, your breeder birds eat very little so you need to ensure that feed carries sufficient nutrients to support their production potential.

The important element is to ensure the breeder feed is “productive” and able to support the full genetic egg production potential of the hens and production of strong semen in the males.  That in turn results in:

  • High fertility, with excellent hatchability - thus reducing significantly the costs of incubation and overall costs of day old chicks (see figure 1)
  • Strong chicks require less heat in cold weather or reduced cooling in hot climates
  • Strong chicks have an improved immune system
  • Strong chicks convert feed at a faster rate and therefore achieve slaughter weight with quality skins months earlier
  • Strong chicks converting feed efficiently produce increased meat yields
  • Increased meat yields reduce processing costs per kilo
  • Chicks maturing earlier have increased percentage of Grade 1 skins
  • Earlier Puberty

The above are all possible provided the chicks also receive feed of “high productive value” and accompanied by "high management standards".

With all these factors correctly in place, the birds are able to optimise their genetic potential and that triggers the implementation of genetic improvement programs and thus enabling an upward spiral of improving performance.

These are the principles of “production agriculture” that has enabled the mainstream livestock specie to become so efficient in recent decades and produce low cost meat.

Chick Feed Costs
Figure 1 - Chick Feed Cost Comparisons
[Source: Cutting The Costs of Production]

Commercialising small holder agriculture

Newsletter No. 45 -  Items 2 - 4

This newsletter discussed an article on a page of the FAO (Food and Agriculture Organisation) web site in 2007. As the following introductory statement under the heading of Farm Management is so relevant in livestock production, discussing the issues continues to be important to those actively working to develop their business based on ostrich production.

Quote: Powerful driving forces are changing farming systems across the world. Globalisation and market development are opening up new opportunities for farmers and local markets are challenged and sometimes overwhelmed by lower priced imports; the result is rapid commercialisation of smallholder agriculture in many parts of the developing world.

Urbanisation is increasing the number of people for whom food must be produced by farmers, increasingly delivered through supermarkets.  As a consequence, farmers are intensifying existing patterns of production, diversifying into new lines, seeking off-farm work, expanding business size and even existing agriculture in an attempt to improve their livelihoods and escape poverty. End quote

Livestock producers have tended to go in two different directions over the past few decades, driven by the “green revolution” and the effect of "globalisation" that has brought about changes in market delivery.

The progressive farmers adopted the new technologies and management systems, consolidated and produce in volume with increasingly efficient methods of production.  These efficiencies are a combination of:

-    Production technology inputs (e.g. fertiliser, weed killers, vitamins, minerals, pharmaceuticals)
-    Management systems to support that technology (e.g. machinery, computers, records, systems, biosecurity)
-    Genetic improvement in livestock, fruit, vegetable and grain production (e.g. winter hardy seeds, high yielding grains, fast growing pigs, high yielding dairy cows).

The result of introducing these efficiencies in production is increased yields, reduced unit costs of production and greater consistency of products required by the buyers of these supermarket giants.

The illustration from the USDA Farm Policy 2001 document, illustrates how the farm supply chain has changed over a very short period.  Note how during the last 10 year period of the illustration selling moved from 5% selling direct to processors on contract to nearly 70% in the US.  It is likely that this figure has increased further by 2013.  We see similar trends in other regions and across most livestock production.  Contracting provides greater consistency, economies of scale and enables the ever increasing demands for full traceability in the supply chain to be maintained.

Hogs Sold by Marketing Method

Hogs Sold by Marketing Method

Whilst this graphic was produced a decade ago, it illustrates the rapidly changing market place and the influence on the supply chain in all species of livestock production.   Small holders linked into the supply chain for larger enterprises enables the benefits of economies of scale whilst retaining the independence of the small holder….provided that larger enterprise operates in an ethical manner to ensure payment terms that sustains the whole supply chain.

World Ostrich Association Publications

The World Ostrich Association (WOA) has a number of publications available to support its members.   All are available free to members of the association and most are also available to download in PDF format.  These are important docucments to support producers, processors and the buyers of Ostrich Products.

WOA Ostrich Carcass Grading processors and meat buyers

WOA Ostrich Yield Payment  processor farmer payment

WOA Factors Influencing Ostrich Meat Quality producers and processors

WOA Ostrich Skin and Finished Leather Grading producers, processors and buyers

WOA Ostrich Feather Structure and Quality producers, processors and buyers

WOA Ostrich Benchmark Performance Targets producers

WOA Ostrich Welfare Guidelines producers, processors and buyers

WOA Guide to Valuing Ostrich Buying, Selling or Insurance claim – how do you value an ostrich?   Available to members only

Ostrich Farming Business Planning Planning Profitable Ostrich Farming from ‘Farm to Plate’   Available members only

Understanding the Productive Value of Alfalfa
This is not a WOA production, but as it is of significant importance in ostrich production, it is included.  It is a link to an external web site.

Establishing Benchmark Production Targets for Ostrich

Newsletter No. 34 – January 2006 Item 7

Benchmarking is a method of understanding the norms as achievable targets, but more importantly understanding that they are targets to be improved on.  Agricultural production has survived the ongoing price/cost squeeze by continually improving production to reduce the unit costs of production.

Our fledgling industry lacks meaningful statistics and the above demonstrates the many pointers as to why we have producers failing to make good profits. The place to develop the data is from the commercial industry's participants.  The more information people are willing to share the more meaningful the information database we can build together to establish benchmark figures that are meaningful and productive for the industry.

Benchmarking records production statistics produced under commercial conditions to help commercial producers have something to measure their performance,  analyse their performance against measurable criteria and work to improve their performance.  If they are not achieving the right performance levels, start asking questions as to why.

A committee of "The Blue Mountain International Ostrich Alliance" (BMIOA) produced a set of performance criteria as a foundation for identifying and grading birds with superior genetics.  As a starting point your directors over the next few weeks will review those figures and publish a set of benchmark standards based on the following measurable criteria and current known information?

Measurable criteria are:

Breeder Birds
Key measurements
- Slaughter Bird/Adult Birds per hen
- Meat production per hen [see note 1]
- Breeder Cost per Day Old Chick
- Incubation Cost per hatched Chick
- Eggs Laid per hen - Number
- Eggs set %
- Fertile %
- Hatched % of Eggs Set
- Hatched % of Fertile
- Eggs per Chick
- Chick Mortality to week 2
- Chick Mortality to week 13
- Chick Mortality to Slaughter or transfer to Breeder Herd

Slaughter Bird Production:
Key Measurements [see note 2]
- Feed Conversion
- Total Boneless Meat
- Days to Slaughter
- Feed Costs to Slaughter
- Carcass Grade

- Liveweight [see note 3]
- Liveweight to Carcass %
- Carcass to Boneless Meat %
- Liveweight to Boneless Meat %
- Fat Weight
- Fat % of Liveweight
- Fat Colour
- Individual Muscle Weights [see note 4]
Breeder Bird Replacement:
- Age at Puberty
ie. hen - first fertile egg laid, male - first egg fertilised
- Progeny Performance
for all production selection criteria being developed in the herd [see note 5]

Note 1
The Slaughter Bird/Adult Birds per hen is the most meaningful figure.
Number of Eggs is meaningless unless Eggs are viable and produce strong, viable chicks.
40 Chicks/hen producing 45 kilos of boneless meat is more valuable than 80 chicks/hen producing 25kilos of boneless meat.
The definitions of Carcass and Boneless meat for measurement purposes need to be adhered to

Note 2
Feed conversion is a critical measurement that is controlled by:
- quality of chick at hatch
- production potential of feed from day 1 to slaughter
- feed management
- farm management (includes environment)
- bird genetics
- desired slaughter weight
- combined with correct feather development to provide high quality skin
Days to Slaughter - earlier slaughter:
- reduces feed consumed
- chick quality at hatch influences days to slaughter
- faster return on working capital
- less infrastructure and space required
Carcass Grade
- increases revenue
- requires marketing to educate market on carcass grades

Note 3
- use in association with the following statistics
- Liveweight to boneless meat
- Liveweight to carcass
- carcass to boneless meat
Boneless meat produces revenue

Note 4
Individual Muscle weights
- Certain muscles are greater value than other muscles
- Genetic selection can include development of body shape to enhance size of valuable muscles, such as the Fan
- Current published muscle weights prove the tremendous variations and potential

Note 5
The relevant progeny performance will be the traits the farm is selecting for.  It maybe:
- Egg production - greatest number of eggs produced
- Meat Production - development of confirmation that results in larger primary muscles, especially the fan
- Leather - particular follicle style
- Fat - good oil market, genetics that produce good fat
- Feed Conversion - the genetics that convert feed the most efficiently
- Large size

All measurable criteria will be observed with individual traits weighted as being more important than other traits.

Low Yield Agriculture vs High Yield Agriculture

Newsletter No. 31 – October 2005 Item 4 

Communicating with producers in different countries and travelling as I am able to do provide the opportunity to see tremendous variations in agriculture in different countries.   Travelling in Bulgaria this month was again a reminder of the importance of agriculture to the local economy.  The collapse of communism resulted in much of the land being returned to the original owners.  In many cases the families had grown, with the land split many ways.   The average ownership is now .3 hectares per producer - tracts of land that are uneconomic.  Farming in most areas has returned to peasant farming producing sufficient for own needs, harvested by hand and carried home by donkey cart.  Crops will have minimal inputs, so output is low.  Cattle, sheep and goats are shepherded on open land and brought home each night.  With low production much of their food is imported.   This situation is not unique to Bulgaria.

A sound agricultural base generates employment and raises the standard of living in rural areas.

Quote: The Green Revolution and the increasing effects of globalisation continue to change the face of agriculture.  The revolution began in 1944 when the Rockefeller Foundation and the Mexican government established the Cooperative Wheat Research and Production Program to improve the agricultural output of the country's farms. Norman Borlaug was instrumental in this program. This produced astounding results, so that Mexico went from having to import half its wheat to self-sufficiency by 1956 and, by 1964, to exporting half a million tons of wheat. This program was continued in India and Pakistan where it is credited with saving over one billion people from starvation. Norman Borlaug won the 1970 Nobel Peace Prize for his efforts.
From there, the technologies were exported abroad, finding use in regions all over the world. The success in increasing yields was undisputable. The growth of crop yields was such that agriculture was now able to outstrip population growth — per capita production increased every year following 1950.  end quote

Note: This quote was taken from this Wikipedia link as it was on the date of first publication of this newsletter item.  Wikidpedia web pages are updated regularly and there is considerable further discussions since that date.

The Green Revolution has been successful through the combined use of improved plant varieties, irrigation, chemical fertilisers, herbicides and pesticides, mechanical tractors and other farm implements.  Livestock production has been supported by the improved quality of the crops, the contribution of the pharmaceutical industry, advances in nutrition and improved genetics.   The effect of these high inputs has been to feed an ever increasing population and reduce the cost of that food significantly.

There have been some negatives identified from this rapid development.  Progress is an ever evolving process with systems developed to overcome some of these negative issues associated with modern agriculture.  Examples are:

•    No Till Agriculture to combat soil erosion and improve soil structure
•    Ethanol Production to provide fuel to slowly replace the finite supplies of fossil fuels
•    Biodegraders to turn waste material safely into usable fertilisers
•    Optimum Nutrition to increase production, reproduction and improve feed conversion making better use of the resources and reducing costs of production
•    Optimum Nutrition to reduce the use of antibiotics, growth hormones and minimise metabolic disturbances in high production livestock

Agricultural Cluster

Figure 1: Agricultural Cluster Supporting Infrastructure and Employment

Apply the modern technologies to Ostrich production and as reported last month, Ostrich can make significant contributions towards providing the additional 50% meat forecast as required by 2025.  Apply these technologies to Ostrich and they can be the most feed efficient red meat production animal.  This cannot happen utilising Low Yield Agriculture techniques.

Environmental Impact of Meat Production

Newsletter No. 30 – September 2005 Item 4 & 5

Environmental Impact
Dr. Elam's discussions relate to making a case that the increased production can come only from intensive farming operations, that anything different will put too much pressure on feed supplies.  Sheep, Cattle and Goats can graze areas that it is not possible to cultivate and it may be possible to improve the efficiency of these grazing areas with better management, including water management.  These issues are discussed by Terry McCosker in the Australian Farm Journal.

However, it is clearly evident that the introduction of the intensive systems for rearing pigs and poultry has had a significant impact on the availability of increased volumes of meat at decreasing consumer prices as these systems are highly efficient.  The increased use of Cattle Feed lots in the United States to finish cattle for the last 90 days on high grain diets has enabled the US Beef industry to produce increased meat tonnage from the same number of cattle.  Dr. Elam stated:

Quote: "Current "organic" technology simply cannot be used to produce the feed crops we need on a global scale.  Yields are 20, 30 or even 40% below what is possible with conventional fertilizers and pesticides, make it impossible to both increase feedstuff production and use these systems on a widespread basis.  There is not enough animal manure to even come close to replacing the current sources of crop production.  Switching to green manure legume crops for nitrogen would merely reduce the land available for feed production."  End Quote

This statement is indicating that green legume crops have no productive value in the production of meat.

Ostrich require as much as 40% Dehydrated Lucerne in a grower ration, when the Lucerne is of the right quality, when fed controlled production rations. Lucerne is a legume and an important component in any crop rotation cycle as it fixes nitrogen in the soil, reducing the need for artificial fertilizers.  Poultry and Pig production is highly dependent on grains to produce the meat, with little or no quality forage included in their diets.  Therefore Ostrich production can help support the production of grain crops produced with reduced input of artificial fertilizers.  The use of high quality Lucerne also reduces the requirement for high protein Soya, thus reducing costs of production whilst improving health and feed efficiency.

Chemical and Pharmaceutical Contributions to Meat Production
Dr. Elam discusses the major technological contributors that have enabled the dramatic increase in food production at affordable prices:

I.   Pharmaceuticals:  Animal health products and programs
examples: Antibiotics, Implants, Parasiticides, Vaccines, Disease Control Programs
II.  Genetics
examples:  Selective breeding programs, identifying most productive breeds
III.  Nutrition
examples: improved feedstuff quality, vitamins, minerals, amino acids
IV. Crop Yields
examples: Improved management systems, artificial fertilisers, herbicides, fungicides.

All the above have contributed to the ability to produce increased tonnages of food at reducing cost.  Questions are being asked now on the impact on human health and sustainability if we continue producing food with such dependency on the chemicals and many of the pharmaceuticals.  Reduced efficiency of antibiotics as there are increasingly resistant strains of bacteria developing, hormone implants affecting the development of our children and parasites developing resistance to some Parasiticides are examples.

It is clear we cannot manage without some of these technological advances; however there have been significant advances in other areas that enable reduced dependency on pharmaceuticals and chemical inputs, without loss of production and increasing efficiency.  Nutrition has made tremendous advances over the past 20 or so years that many health problems can now be controlled or prevented through nutrition rather than antibiotics. This statement applies to humans as well as livestock production.  Antibiotics will still have a role to play in treatment but used with far more caution; vaccines will always have an important role as part of disease prevention programs.

As referenced above growing Ostrich require around 40% of their production rations to be dehydrated Lucerne - a legume.  The ability to produce large volumes of meat efficiently from Lucerne will enable greater acreages to be planted with this crop that fixes nitrogen in the soil and forms an important part of any crop rotational program to reduce the dependency on artificial fertilisers.   The development of No-Till agriculture is another technological development that continues to reduce the dependency on chemical inputs whilst retaining high volume of out put.  No-till agriculture uses less fuel with fewer passes over the land thus reducing input costs without loss of production.  Biogas technology is enabling better use of waste to reduce dependency on artificial fertilisers.   All these factors are technological developments that combine to help reduce dependency on chemical inputs, without risking loss of production or increasing costs.

Creating Long-Term Value

Newsletter No. 27 – June 2005 Item 1
Contributed by Paul Benson, Ontario, Canada

In any well established industry, the only source of value to participants comes from the end-user of the products. Their purchase dollars pay everyone’s bills and provide the profit due to anyone who participates in providing that product in a professional, customer-focused manner.

There may be short-term opportunities for profit by some participants in the chain prior to the industry reaching a stable, consistent, and productive level, but these opportunities are most likely transitory.  For example a breeder market develops, typically using investor capital, until volume production is achieved.

Similarly, there may be “fire sale” pricing as some participants exit the industry and others address production and quality issues. These types of opportunity are unlikely to enhance the value of industry products as seen by the retail customer, and may indeed put them off purchasing (too much uncertainty).

In assessing value, the customer is likely looking for quality, value, consistency and availability of product.

If everyone involved is focused on enhancing final customer value, the customer recognizes it and the size of the industry “pie” grows exponentially.

Problems occur when any one part of the chain operates without providing any additional value, or acts in a way that reduces value. Examples might be aggressive trading of poor quality product and dumping it on unsuspecting customers. Other “value leaks” occur when either availability or quality is unpredictable, or one portion of the chain takes profits disproportionate to their contribution (“starving out” other effective participants).

Examples of these problems abound in agricultural history in many countries and continue today!  The challenge lies in learning from them and reducing or avoiding similar practices. The value chain is really only as strong as the weakest link. Overall strength requires partnerships based on mutual respect and understanding.

Delighting your customers and looking out for everyone in the industry is the best policy for building a loyal customer base and growing the industry into a competitive presence in the food production environment.

Concentrate on building you own strengths as professionals in agro-business, but also support your business partners in achieving a win-win result for your customers. The results will repay your efforts handsomely, as the ultimate value delivered grows exponentially, and your share will reflect that growth.

Good luck with the development of an effective, responsible, and sustainable industry!