Production must match demand

Mossel Bay, SA – Ostrich remains an industry where no-one can fall asleep.

 

From a global perspective, we’re a small player, even within the limited world of exotic leathers and meats. The positive side of that is that within our niche we’re not dominated by any other country. We have unique products.

We also appear to be safe from the trend towards vertical integration which has affected the crocodile industry, for instance. There are too many problems with ostrich for the fashion houses to want to get involved.

 

As an industry, we’ve been forced by Avian Influenza to develop systems to limit its impact by lessening the likelihood of it spreading because of our actions. They’re very good systems, well implemented by producers and the SA Ostrich Business Chamber – which is authorised by DAFF to control the movement of ostriches up to the time of their slaughter. There is far less movement of birds, and the forward and backward tracking of birds that are moved is precise. We’re in a better position than we were in terms of risk.

We also have a much better working relationship with DAFF, which is the ‘competent authority’ in the event of AI or other health issues, particularly in respect of international trade.

 

The danger posed by AI hasn’t gone away. An outbreak detected in any area of South Africa today would mean the country would be closed for the export of meat tomorrow. There is no agreement on compartmentalising the country with the EU, our major meat trading partner, because of different reasons like no movement control on poultry in general.

 

The re-opening of the EU to raw (fresh and frozen) ostrich meat has not resulted in the volumes as expected. Prior to the outbreak of AI which led to the ban on exports in 2011, more that 90% of the South African ostrich meat production was exported as fresh/frozen meat to the EU.

 

When the meat returned to the European market in August 2015 after an absence of 4.5 years, the demand was fantastic and the prices were 3-4 Euros more per kg than prior to the export ban.

By March 2016 it was clear the hype was from importers, not consumers. They took frozen and fresh meat and they’re still sitting with some of the frozen meat. German supermarket chain ALDI used to take 600 tons/year – now they’re not keen to put it on their shelves at all.

We’re also battling to convince the catering industry – restaurant groups and others – to put ostrich meat back on the menu.

Ostrich meat competes with products like kangaroo and bison.

 

When meat exports stopped, leather became 70% of the industry’s turnover, and it enjoyed a high point in popularity. Currently that has slipped, and meat and leather are about equal.

We need leather as the long-term stabilising factor, but at the moment the tanneries are building stock and we have to reduce production of ostriches to balance supply and demand.

The cost of slaughter bird production has risen – in part because of the drought – which puts pressure on farmers to slaughter earlier. That has negative consequences for the leather quality in terms of substance of the skins and also impact negatively on feather quality.

We have to regulate ostrich production to match demand. At the moment, most of the profits in processing are being used to finance stock.

 

All said, the ostrich industry in South Africa still has a comparative advantage and although not easy, we have the skills and experience on producer as well as processor level to steer the industry through the difficult times. – [+27 (0)44 606 4500, fdewet@mosstrich.co.za]