"SPECIAL" OSTRICH NUTRITION BULLETIN
From Daryl Holle
Blue Mountain Feeds, Inc.
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TOPIC For Special Bulletin Report on October 27, 2001

1. Report on Ostrich World Conference 2001
By Fiona Benson, Blue Mountain International

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Report on Ostrich World Conference 2001, Rheinmunster, Germany

The past couple of months has seen several conferences and workshop meetings two in South Africa and now the meeting in Germany. Still to come is the World Congress in Brazil. There has been some confusion amongst people regarding the difference between the conferences which may warrant a little background explanation:

The World Congress was first started by the European Ostrich Association in the early 1990s, first in Holland, then Spain, Portugal, Italy and now Brazil. The EOA, like so many associations, was very strong during the breeder phase and then became progressively weaker. Some will say this was caused by personality differences, others say funding, others say lack of direction, industry immaturity. All of these factors, and many more, will have been contributing causes. With the demise of the EOA, certain people are still eager to see the getting together of others continued to hold the World Congress. The focus of these conferences has tended to be more focused on primary production rather than market orientated as they have been held in countries still starting out in the Ostrich industry.

The IOA has held conferences each year, since inception in 1997, that have been geared to the overall development of the industry and the markets with little concern and effort towards improving primary production. This year whilst the conference was not run by the IOA, it was endorsed by the IOA. It was organised and run by Christoph Kistner and Uschi Braun in Germany. Our thanks go to them and all those who put on conferences as it takes a great deal of hard work.

To understand the discussion at this year's conference, it is necessary to discuss briefly the situation in South Africa. As most readers are aware, the South African industry has been based on skins being the major earner of revenue and meat as only a by-product. Producers and processors have seen meat as representing only 25% of the total revenue of the birds. This has resulted in a lack of willingness for many in the South African industry to grow beyond the number of skins they could comfortably sell. This has been compounded by a 'mind set' that has failed to recognise the old '95kg 14mth slaughter weight' was loosing significant revenue from meat production, resulting in an expensive bird to produce and process along with the fact that these types of birds yield poor and inconsistent quality products.

The skin market was developed by the KKK prior to deregulation in SA, but that market was confined only to Japan. New entrants from within South Africa and throughout the world have, for the most part, continued to sell skins into this market rather than develop new markets. This market is now saturated with skins and the situation compounded by the weakening economy in Japan. All the speakers on leather referenced the lack of market development.

As a result of the BSE spreading in Europe, there is now a demand for alternative meats and Ostrich even in view of the fact that it is farmed, it is growing in demand and this demand far outstrips supply. There are now two clear fields of thought. One thought is to continue to control production to a size where skins can be marketed retaining their 'exotic' status and the other thought is to go for the meat production and allow the skin to have a nil value, if necessary. A number share my thoughts that the solution is in fact to develop a strategy between the two. To focus on meat as the "primary product" will provide the greatest opportunity to bring stability to the industry, as skins are susceptible to the 'whims' of the fashion market.

Until now, 'the 95kg 14mth' slaughter bird strategy has resulted in some extremely poor and amateurish Ostrich production practices when compared to other professional livestock production specie. Producing birds in half the time with similar meat yields, or a few months later with double meat yields, makes a great deal of commercial sense and increases the bird's commercial viability for many reasons. One such reason of course is that double meat yields per bird results in double the meat for the same number of skins.

The economics of producing and processing these larger types of birds results in a commercially viable meat bird, where the skin will be of secondary value. The car seat market was discussed with the conclusion that the skins are not large enough to supply this market. Larger meat birds produce larger skins and therefore increased usability, which increases the value to the manufacturer. An additional bonus is that now birds are very much healthier and therefore the skins will be healthier and of more consistent quality. They will slot into a quality leather market from their 'exotic' status much more easily than the current type of skins being produced. It will take good planning and marketing to make the transition from skin driven to meat driven.

In recognition of the need to develop the leather market, it was reported that the South African industry has now committed a considerable sum of money to develop the skin market. Attendees at the German conference were asked if they would contribute to the fund as all will clearly benefit and it was suggested that it is unfair for one country to spend all the investment on the marketing for other's benefit. Methods on how this is to be achieved have still to be discussed and agreed upon.

Day 1 of the conference covered the skin market. The second and third speakers both opened by stating that Pieter Strijdom (first speaker) had covered much of what they were going to say and we (Blue Mountain) have been stating this for some years now. The detail of the discussions will be made available on the IOA web site so I will use this report to discuss the aspects that require attention rather than discuss the detail of particular speakers.

It is worth remembering an important statement made by Dr. Hannekom, the manager of the South African Ostrich Business Chamber, towards the end of the South African conference a couple of weeks ago. He summed up the presentation given by an economist:

"The key message I take from this talk is that if care is not taken incorrect decisions can be made through not paying ATTENTION to the FACTS that are available to you."

At this time, the basic facts that are being missed in all discussions that I have heard both at this conference and at the SA Conference are:

1. OSTRICH ARE THE MOST EFFICIENT CONVERTER OF FEED TO MEAT OF ANY RED MEAT SPECIE.
 
2. Most birds currently being raised are suffering from malnutrition to a greater or lesser degree. It would be fair to state that in excess of 90% of all birds demonstrate symptoms of 'clinical unthriftiness'.

3. Ostrich are very capable of achieving greater than 40kgs of BONELESS MEAT yet the majority of birds slaughtered barely yield 25kgs of boneless meat. With the correct program in place the potential of Ostrich to far exceed these yields is very possible and clearly achievable.

4. Until they are producing a minimum of 40kgs of meat, they are not cost effective to process unless there is an artificially high value for the skin, which presently does not exist and may never exist.
  
5. Once achieving these high levels of meat production, these birds offer extremely cost effective production of quality red meat.

Day 2 of the conference covered the meat market. There was a warning issued by several not to let the price go too high or there will be consumer resistance and we risk loosing the opportunities created by the BSE situation. Reference was made to 70% of all meat produced now coming into the German market.

General slaughter bird production statistics were provided:

Africa..355,000
Australasia..38,000
Asia..39,400
Middle East..31,000
Central Europe..75,000
Europe..8,000
Scandanavia..5,000
USA and Canada..25,000
South America..9,400

Total approx: 550,000 to 600,000 Slaughter Birds

Now think through these figures for a moment. This represents, at current meat production levels, some 13,750 tonnes of total meat with birds averaging 25kgs...increase that to 40kgs and there is an additional 8,250 tonnes for an increased total of 22,000 tonnes of meat.

At the lower price currently being paid for deboned leg this is equivalent to approx. 57,750,000 EU = 105 euro/bird. At the higher prices currently being paid that ADDITIONAL revenue represents 120euro/bird. This ADDITIONAL revenue is close to covering the total 'production' feed costs of a slaughter bird.

These production figures were provided, when discussing skins, to make the point that currently the market size is only 200,000. This particular mind set has caused the stagnation of the industry for the past decade, as there has been minimal market development for the skins. This is the first conference that I have heard the word 'market development' referenced more frequently than 'over production' when it comes to discussing skins. Why has it taken a decade to reach this point? I would suggest it is a lack of ATTENTION to the facts of producing a commercially viable Ostrich cost effectively.

During the meat session, the buyers of the meat provided their input. One buyer sent a very clear message on what the consumer requires:

Meat Quality & Consistency
Security
Consistency in Supply
Consistency in Price

With current methods of production, the breeding season is cut short and therefore very seasonal especially in South Africa where the birds are separated for an extended period of time during the off season. This has a tremendous negative influence on consistency of supply. Another factor affecting consistency of supply is the overall productivity on farms regarding the number of chicks that make it to slaughter per hen each year. This can be as low as 10 or in excess of 40/breeder hen and this can vary from year to year from farm to farm and must be improved. One buyer reminded those present that a slaughter plant cannot shut down for Christmas, the time of highest demand. South African slaughter plants have been shutting down for 3 weeks at this time of year, I cannot speak for other regions, as I have no first hand knowledge.

The conference was reminded on several occasions for the need to retain the 'clean and green' image of Ostrich. It is essential that we establish a 'clean and green' image. If we achieve this, it will be many years before we satisfy the potential demand for the products.

On the marketing side, reference was made to the various 'quality' standards that are now emerging 'Organic', 'Security' and so on. It was with great pleasure that I learned of another within the animal feed industry during my time in the United Kingdom this week. This has been encouraged by the supermarkets to improve the standards of the animal feed industry and a move we would most certainly welcome. During one of my papers at the 1999 World Congress I referenced three major food problems that have cost the tax payers in their respective countries considerable sums of money...BSE being one such problem. The introduction of these new standards for feed mills will result in greater controls and food safety. My research has clearly identified the Animal Feed Industry as having cost the new Ostrich Producers very dearly with poor Ostrich production and poor quality end-products but this did not have to happen if producers were paying attention to the facts that are available to them.

There were in total some 150 people from more than 20 countries, with some unable to attend as they were not able to get Visas for Germany. These numbers continue to demonstrate that the industry is truly global when it comes to Ostrich production. The common factor at both this conference and the South African conference is the understanding that much needs to be done to develop markets and the continued emphasis on the importance to retaining the value for skins but the continued lack of attention to the facts at the "primary production" level.

Both the NOPSA workshop meeting at the end of August and the SA Conference held group sessions to help develop strategies for sustainable growth. All groups defined the correct principals. The same principals were discussed at the conference last week, but no answers have been forthcoming and I would suggest that it is because the "fundamental understanding of Primary Production" is presently the missing link. Once attention is paid to this, everything else will fall into place.

Blue Mountain has quantified these principals and has also produced a framework under which they can be implemented. The past decade has resulted in considerable experience gained by many in their different areas of expertise--the amalgamation of this expertise will result in a progressive industry with sustainable growth in the right direction. It clearly is time to start progressing the industry using known FACTS to improve our "primary production" and product quality while at the same time include the talents and expertise of those that understand the potential of a commercially viable Ostrich. Assembling this type of talent together in one place will allow us to progress during the next decade in a manner that Ostrich was always meant to be.

‘Til Next Time

Last modified on Monday, May 06, 2002