World Ostrich Association Newsletter No. 100
July, 2011

Included in this edition:
100th Edition
South African Influenza Outbreak Update
OECO-FAO Agricultural Food Outlook 2011-2020
G20 Agricultural Ministers Action Plan

100th Edition
This newsletter is number 100 since the association was formed in September, 2002.  It is with regret that we continue to witness slow development in production when demand for our products remains strong.   Over the years the newsletters have discussed many of the reasons for this. 

Over the past 6 months a series of articles have been published on a new Ostrich web site.  These articles start with a history of our industry and discuss the various elements of the business plan required when developing an ostrich business.   The saying "No Production No Industry" is true.   The production on farm has to be in place, efficiently producing sufficient number of birds to provide a regular, consistent supply to the markets.  

Figure 1 illustrates the interdependency of all activities in the production chain and the importance of ensuring end markets.  The relevance of this is all that all too often as 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.  This resulted in no sales revenue continuously entering the industry and profits to re-invest.

Figure 1 - The Ostrich Financial Cycle

Where sales have developed, the standard of farming was so poor that it was hard to maintain consistency of supply of slaughter birds and product.   Most importantly as the production standards remain poor on farm, it is impossible to produce the products profitably until the industry adopts commercial systems of production. 

South African Avian Influenza Outbreak Update
The South African Business Chamber has published an update on the outbreak we reported in the last two editions of the newsletter.  10,000 ostriches are reported culled to date.  The outbreak is reported to be confined to the Oudtshoorn Valley and whilst meat exports are sill banned, slaughter birds from other areas are supplying the local markets.  A report is now published on the South African Ostrich Business Chamber website.   Following the visit of the team from the EU as reported in last month’s newsletter, there are reports of 10,000 ostriches now culled in an effort to halt the outbreak.

This latest outbreak is again a reminder of the devastating impact on an industry when a disease outbreak occurs.  It is a reminder of the importance of providing high standards of management, including adequate biosecurity.

OECO-FAO Agricultural Food Outlook 2011-2020
The OECO-FAO Agricultural Food Outlook 2011-2020 is now available for download from their web site.  They discuss the expectation that commodity prices will rise steadily towards 2020, with meat up by around 30% and grains by 20%.  However, they also mention that if there is a good harvest this year, grain prices may drop from the current highs.  We could say that we are already witness that with some significant reductions in prices over the past few months.   

The pigsite.com has an article discussing the report.  Figure 2 are the updated Food Price Index and Food Commodity Price Indices.    Figure 3 summaries the period from 1990 to current for the Food Price Index and meat and cereals.  The graphic illustrates the increasing variability in prices since 2005.

Figure 3 - Historical Indices

It is clear that we are entering a period of less stability in food prices with a number of reasons driving these changes.

G20 Agricultural Ministers Action Plan
Agricultural Ministers from the G20 countries met in Paris on 22nd and 23rd June.  The objective of the meeting is to improve food security and agree on an “Action Plan on Food Price Volatility and Agriculture”.   The document produced under that heading is a 24 page document that outlines their objectives to present to their leaders at their summit in November, 2011. 

The following is a press release just issued by the OIE (World Organization for Animal Health) following the meeting.  Note the recognition of the importance placed on the role of animal health.  The current problems in South Africa in an area where 70% of the production ostrich are situated illustrate just how devastating to not only individual businesses but also a complete industry a breakout of a disease can be when not contained adequately.

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