Ostrich industry needs a different business model

Oudtshoorn, SA – The circumstances of the ostrich industry have changed dramatically.

 

In 1997, the total ostriches slaughtered by South African Ostrich farmers was 400 000 + birds. Last year this figure dropped to around 180 000, and there’s all reason to believe there will be a decrease in production this year.

 Our group’s chick production this year was 35 000 / 40 000, of which we anticipate to slaughter 25-30 000 between August this year and May next year. The balance we will sell or lose through natural attrition.

Before deregulation of the Ostrich Industry in October of 1993 the grading mix of raw skins delivered to Klein Karoo Co-op was regularly around 80/15/5% for grades 1/2/3.  Presently farmers are lucky if 20% of skins qualify as grade 1. The difference is due to market related grading standards, not in the quality of raw skins.

 

For the famous brands, the quill area of a grade 1 skin has to be blemish free, but a fairer grading approach should be in accordance with cutting value – for example a consistent 3 pairs of blemish free full quill vamps per skin should qualify as grade 1.  Depending on the positioning of blemishes even a grade skin 3 can secure blemish free end products. 

 

All this, along with the negative impact of Avian Influenza protocol enforced on ostrich farmers have led to uncertainty. The need for greater unity for the industry to survive is now inevitable.

 

We cannot afford to let KKI or Mosstrich fail.  However to avoid entire industry failure the primary producer must be able to make ends meet.

A former CEO in the industry used to remark that “change would only occur when the pain exceeds the joy”.  The industry has now reached the point where impartial “out of box” thinking should prevail.  Ostrich farmers can no longer afford to finance the luxury of duplicated state of the art facilities and management.  

 

Moving back to a co-operative system under the Co-operative Act where the realisation of year end stock could be redistributed by way of pool accounts, in the following financial year among those farmers responsible for delivery there-of should also be a consideration.  This could be a more realistic approach as opposed to the way year-end carried-over stock is dealt with in present company structures where cross pollination prevails.  

We need a more inclusive model as farmers generally accept what they are given.  

 

A merger between KKI and Mosstrich would however be the ultimate as it would immediately stabilize the South African ostrich industry to the benefit of primary ostrich farmers, processors as well as global manufacturers and distributors.  As for ourselves we would naturally like to be part of such structure – [+27 (0)44 203 3200, saag@opsa.co.za]