Poultry shortages show huge prospect for investment in maize
Nigeria’s poultry farmers are failing to meet the needs of the local market on account of the high cost and low availability of stock to feed their birds, following a limited supply of maize, the major ingredient in poultry feed.
The Agriculture Promotion Policy released by the Federal Ministry of Agriculture indicates that Nigeria’s annual chicken consumption is 200 million birds, while supply is 140 million birds. The deficit of 60 million birds is filled by illegal imports that enter the market at lower price points than domestic producers, and this gap is also a moving target based on fast food/QSR demand.It is thought that supply gaps have aggravated and these estimates paint a better picture than current realities.
Industry watchers say this highlights opportunities in feed and bird production, as well as well as for research into the local manufacture of certain nutrients such as vitamins and enzymes contained in poultry feed, which are currently mostly imported.
“The scarcity of maize is as a result of two major things, one is the drought which occurred in the country last year, so farmers could not plant as much, and whatever was available became very expensive. The second is the forex incapacitation which is not allowing many companies to import maize as they were doing before,” Olusegun Falade, head, Agric Inputs, Flour Mills of Nigeria told BusinessDay.
The situation is forcing many poultry farms to shut down, while more contemplate toeing the same line.
“A friend of mine recently told me that he is going to close down his poultry and concentrate on crop farming because the cost of feeding the birds is very high,” Michael Aderohunmu, CEO, M&K Agro tells BusinessDay.
Aderohunmu further says “a major component of that is maize, so we need to bring more farmers together to cultivate maize.”
Furthermore, killings, insurgency and the Boko Haram menace have seen many farmers ending up in Internally Displaced Persons (IDP) camps, instead of being on the farms, and tilling the soil.
BusinessDay is further informed that some brewers have shifted from using barley or sorghum in their production process to using maize and that this is putting an extra strain on the maize market.
In addition, the devaluation of the naira, according to Bode Adetoyi, chairman, Poultry Association of Nigeria (PAN), Lagos State chapter, has “made some northern farmers sell our maize to Niger, Mali, Benin Republic, Central African Republic (CAR) etc.”
Also, many breweries and cereals companies in the country use maize, and poultry farmers cannot afford what these other demand classes pay.
While the situation has been precarious for thousands of companies and individuals in need of maize supplies, experts say it also indicates an opportunity for increase in maize cultivation.
Falade says, “A lot of demand for maize is available, but because there has been a mix of both the import and local production, it was not very apparent until now. What I think is necessary, is to encourage more farmers to cultivate maize, especially the small holder farmers, and also to encourage a lot of small scale industrial farmers to also engage in maize cultivation with the introduction of various varieties of hybrid seeds to be able to farm so that it becomes much more economical to farm.”
This is corroborated by Aderohunmu of M&K Agro, who also says, “There are lots of opportunities in maize cultivation today because of the high demand. Major producers of feed mills are desperately in need of maize to mix with the poultry feed so I think that one of the opportunities that can be derived (which I am even trying to put to practise on my end) is to bring farmers together to produce and cultivate more maize to be supplied to producers such as feed mills.”
Maize completes its cycle within three months, making it possible to cultivate year round with adequate preparations, including irrigation when needed in the absence of rain fed cultivation.
“The poultry industry and feed business is already collapsing and farms and feed mills are closing every day,” Adetoyi, chairman of PAN, Lagos state tells BusinessDay.
Adetoyi further laments, saying “I have more than N900 million unserviced orders to produce and supply feed, but I cannot approach banks for loan at 30 percent interest rate. The Agric Intervention Funds at single interest rate are not accessible, they are mere political statements.”
Bayo Adebanjo, CEO, Tard Farms also says, “The poultry business is facing high cost of feed. Average price of a bag is about N3,000 now; an increase of about N800 between January and now. The bigger problem is the drop in quality of the feeds as the millers are also cutting down on some of the nutrients to manage their costs and margins. Most farmers now get below 60% efficiency from those standard feeds. I believe the millers are also faced with unstable /escalating exchange rate and other raw material sourcing challenges.”
BusinessDay findings have revealed that there is insufficient maize and soya to produce poultry feed. There is also the problem of lack of Forex to import vitamins, minerals, amino acids, enzymes, premixes, and other feed additives which are not produced in Nigeria.
Adetoyi tells BusinessDay “for some of us that produce and supply these feed additives, we wait for forex in the banks which are not forthcoming at official rate, we currently source forex from the parallel market at N460 to a dollar to import.”
Currently there is a shortage of vitamins and minerals for poultry and without it, feed millers cannot produce.
There is also the lack of access to single digit interest rates of which Adetoyi says “we are using commercial loan at 28 to 30 percent to run poultry business which raises the cost of funds, thus raising the cost of production. There is also arbitrary electricity bills, multiple taxation, low prices of eggs and chickens in the market when people do not have purchasing power. Even at high cost of production of eggs and chicken we have to sell below cost to enable us carry on.”
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