To further shed light on the development and outlook of poultry industry, we recently talked to Aziz Sacranie, the Technical Director of the Poultry Division of Alltech, a leading animal health company. Sacranie used to teach poultry science at the university college in the UK before he worked in multinational agricultural companies. Since the early ’70s, he has been traveling and observing the poultry business in the Asia Pacific region and is very familiar with the development of the Philippine poultry industry. He has visited companies like Purefoods, Vitarich, San Miguel and RFM and has helped in the management and the poultry divisions of the said companies.
Excerpts :
How has the poultry industry evolved in Asia over the last 10 years?
I think it has come from being mere small producers to a consolidated type of production. In other words, the global poultry industry has developed in this format. You have a situation where many people think that there’s money to be made in poultry so they say, we’ll go poultry farming. They start going into that and they find that their margins are very narrow. This means that they have to increase their number of units. However, because you have the volume, you have a larger profit share. This means that if you’re going to be big, you have to consolidate. So the small companies don’t survive. And this has been the trend across Asia and even globally. In some countries it’s slower, in other countries, it’s faster.
What about in terms of technology?
I think over the last 10 years technology has been geared towards genetic improvements. This has been phenomenal. If you’ll look at the growth rate, if you look at the Feeds Conversion Rate(FCR), it has just come down. However, the industry has not been able to get the full genetic potential. So I think the next thing I would say that happened over the last ten years has been that Asia has gone to a closed house farming. In other words, they put their chickens inside their house an they’re controlling the environment there. MOst of the broilers and parent stock are now in kept in houses that are tunnel ventilated with evaporative cooling system in order to bring the temperature down. What does that mean? It means we can improve our livability. This means less heat stress. It means that we can put more birds per square meter.
What are your observations about the poultry business in the Philippines?
In the Philippines, you’re still in the broiler phase, you’re still not really down there. But there’s a huge potential in the Philippines for companies to improve performance and improve profitability through volume production by using this kind of housing. The technology is there and it’s not a difficult technology. The companies that are using it to their benefit. There a few of them. A lot of breeder farms are in control environment houses but in broiler production, most of there are still open house. So you have seasonal problems.
Let’s talk about the changes that happened in poultry nutrition?
The breed has changed. Genetic potential has changed. Therefore the nutrients required also changed. Imagine this, in 1960, if you look at the incubation period of a broiler chick, it’s 21 days and then it took 56 days to get to market weight or maybe longer. Today, for the same weight, it only takes 42 days. So when you think about it, 50% of the chick’s life is in the embryonic stage or in incubation. So the kind of nutrition that you give them, is you have to think about the survivability of the embryo as well as the survivability of the chick that is going to the farm. So I guess the greatest understanding we’ve had is how do we feed the parent that will allow us to transfer nutrients into the chick so that the chick will be viable and it will hatch out and it won’t die on you on the way to the farm. So our understanding of neo-natal nutrition has improved in a great way. The other area that we have understood better nutritionally is how to ensure the integrity of the intestinal tract. Again, if you consider that the biggest organ in a chicken’s body is the gut. So if you can look after the gut, you can look after everything. So we have a better understanding of the gut. How to develop it, how to maintain it, how to prevent damage to it.
And your forecast for the poultry industry?
I must say there is a bright future for the chicken industry but like I said, it has to consolidate in order to remain viable. We have to keep the prices at its lowest as possible. You have to keep the prices at its lowest as possible. You have to use economies of scale in order to actually produce this.
Production and Market Trends Affecting the Broiler Industry :
- Increased production of commercial sector
- Competition among big supermarkets driving margins in the sector. Per capita consumption is low compared to other countries
- Emphasis on convenience and ease of preparation - chicken rotisseries, processed chicken products
- Relative price of other protein substitutes
- Supply and disease concerns of other meat products
World Broiler Market in 2008 :
- Total world production is projected to grow 2% and exports are Total world production is projected to grow 2% and exports are expected to grow 4%.
- China is forecasted to import 9% more as domestic pork supply in China is forecasted to import 9% more as domestic pork supply in the country is tight. Since poultry is widely substituted for the country is for pork meat and poultry meat, prices are lower compared to pork, the country and poultry meat prices are lower compared to pork, the country is seen to bring in more poultry meat. The Beijing Olympics is also seen to bring in more poultry meat. The Beijing Olympics is also expected to spur demand.
- Russian imports will remain unchanged especially with their customs regulations which raised minimum prices of poultry.
_ Japanese importation will also remain constant. Preferred supplier is now China due to it lowered prices for grilled yakitori.
- EU importation from Brazil will also decrease due to quantitative restrictions imposed by EU on Brazilian salted chicken meat.
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