By: Fares Hammoudeh 12.March.2014 Water Along the Food Chain in Jordan Organized by EBRD FAO

Transcription

1 By: Fares Hammoudeh 12.March.2014 Water Along the Food Chain in Jordan Organized by EBRD FAO

2 B.S. and M.S. of Industrial Engineering, Purdue University Deputy General Manager, Jordan Feed CO Vice Chairman, Poultry Producers Association

3 1. A brief history, data analysis and remarks in the last ten years 2. Challenges, Weaknesses and Recommendations 3. The outlook of the broiler industry in Jordan in the coming years

4 Jordan as other developing countries enjoys a leading demand growth in its food Chain; this is due to different factors: 1. The growing population 2. The concentration in Cities 3. The rising per capita income 4. Dietary changes 5. Increasing number of Syrian refugees and other expats from neighboring countries ( Egypt, Iraq, nowadays maybe Ukraine) This increasing demand has made the broiler industry a main player in the food chain.

5 The Broiler Meat Production is the largest segment of Jordan Agriculture Sector as it made up 28% of its total output in Its is 51% of the Animal Production Sector. The Agricultural Sector input was 2.7% of Jordan s GDP in Therefore, we can say that Poultry Sector s input was 0.75% of Jordan s GDP in Broiler Production dominates the agricultural sector and it is the main supplier in protein terms of food than all other animal protein combined.

6 The total investments in the broiler industry are estimated at 1 Billion Euros. It is estimated that the Poultry Broiler related Industry employs people. This includes broiler hatcheries and rearing industries, slaughterhouses and processing sectors, and other related feed industry. Per capita consumption of the poultry meat was 32 Kg per person in 2012 and the local production accounted for 87% of the total consumption. The broiler meat production has significantly increased by 75% in 2012 compared to the year This is mainly driven by the increasing demand.

7 In 2012, there were (1722) broiler farms with a capacity of (28) million birds per cycle which means a capacity of (168) million birds per year or a capacity of (244) thousand MT per year. But the actual production in 2012 was 195 thousand MT. This means an efficiency of 80%. This is due to mortality rates, management, diseases, and feed conversion ratios. There are 9 slaughterhouses with a capacity of birds per hour where they slaughter about 55% of the locally produced broilers. Jordan has also spare capacities in grandparents, broiler breeders and hatcheries to provide the local broiler farms with extra 25% one-day old chicks with the current capacities.

8 Number of Capacities in 2012 Actual Production 2012 farms/hatcheries Grandparents million breeder chick 1.95 millions produced; 500 thousand exported 300 thousand imported Net Number of Breeders Raised Locally= 1.75 millions Broiler Breeders million hatching eggs 270 million eggs produced; 230 million eggs in Jordan and 40 millions exported Hatcheries million chicks 175 million chicks

9 Going back to Broiler Farms; in the following table, you can see that the number of farms went down from (2213) farms in 2002 to (1722) farms in 2012, a decline of 22%. But the capacity of the farms has increased from (175) thousand metric tons to (195) thousand metric tons, up 11%. Year Number of Broiler Farms Broiler Meat Capacity (thousand metric tons) Change -22% +11% This is mainly due to the introduction of new poultry equipment technologies and the use of closed system houses in which increases the number of birds per square meter from 10 birds to 18 birds. In addition to that, larger poultry integrators and medium farmers increased their capacities while many smaller farmers quit raising poultry or switched to layers.

10 The Poultry Meat Production has significantly increased by 75% in 2012 compared to the year This is mainly driven by the increasing demand. As you can see in the following table, the actual production was (117) thousand tons in 2002 while it became (205) thousand tons in The table also shows that Jordan nowadays consumes more poultry meat than what it produces locally. There were no imports of poultry meat in 2002 while we had imports of (40) thousand tons in So the imported poultry meat was about 13% of the total poultry meat consumption of An interesting figure in the table is the total consumption of poultry meat jump from (118 thousand tons) in 2002 to (240 thousand tons) in 2012, a growth of 103%. The table also shows clearly the per capita of poultry meat consumed has increased from 22 Kg per person in 2002 to 32 Kg per person in An increase of 45.5%.

11 Year Actual Production (thousand tons) Imports (thousand tons) Exports (thousand tons) Consumption (thousand tons) Per Capita Consumption ( KG per year)

12 Actual Production (thousand tons) Consumption (thousand tons) 0

13 Poultry Meat Per Red Meat Per Capita Fish Meat Per Capita Capita (Kg) (Kg) (Kg)

14 Jordan imports 98% of its feedstuffs that make the final broiler formula. Yellow Maize and Soybean Meal make up about 85% of the complete broiler feed. Where the rest 15% feedstuffs are: vegetable oil, amino acids, premixes, calcium phosphate, etc Corn is mainly imported from Argentina and Brazil. Little quantities are imported from Ukraine and Romania. No US Corn in the last two years. Soybean Meal is imported mainly from Argentina and some from Brazil. The other 15% ingredients are imported from Europe, China, Tunisia, etc

15 Corn (metric tons) Soybean Meal (metric tons) Other Ingredients (MT) Barley and Bran (MT) Total (MT) Broiler Feed 365, ,000 56, ,000 Breeder Feed 60,000 14,000 7,000 15,000 96,000 Total (MT) 425, ,000 63,000 15, ,000 The total feed used in Breeder and Broiler Feed was (657 thousand MT) which made 80% of the total poultry feed (825 thousand MT), and made 60% of the total animal feed in Jordan (1.1 million MT). Feed accounts for 75% of the total cost in broiler meat production. Therefore, it is very important to focus on feed productivity, maximize biological and economical performance to increase poultry efficiency.

16 FCR is a measure of an animal's efficiency in converting feed mass into increases of the desired output. For Broilers, the output is the mass gained by the animal. Specifically FCR is the mass of the food eaten divided by the output, all over a specified period. In the early 1980s, FCR was about (2.7) In the early 2000s. FCR was ( ) Nowadays, FCRs of ( ), and few FCRs of ( ) For example, a broiler chicken at an age of 33 days that ate 2.65 Kg of feed would give 1.77 Kg of meat. In another way, 2.65/1.77 gives an FCR of 1.5 which means a chicken needs 1.5 Kg of feed to get 1 Kg of meat.

17 How many Liters of water to make 1 Kg of Chocolate?

18 Each day a person drinks 2-4 liters of water, but eats food that requires 2000 to 5000 liters of water in its production. Look at the table below to see how much water is required to produce a selection of common foodstuffs. For example, Chocolate tops the list with liters of water to produce 1 Kg. While 1 Kg of Eggs demands 196 Liters. 1 Kg of foodst uff Liters of Water Chocol ate Beef Sheep Broiler Olives Rice Pasta Apples Eggs Among the protein animal production chains, broiler production is the least water user, demanding 3900 liters to produce 1 Kg of meat, while beef demands liters per kg, and sheep meat demands liters. Nowadays, with the advanced technologies in the processing plant and farms, along with the water conservation programs, these numbers should go down.

19 1. Broiler Industry is a key player in Jordan s economy which employs people and is 28% of the total Agriculture Segment and 0.75% of Jordan s GDP in The poultry meat consumption has increased in the past years as rising living standards are pushing larger numbers of consumers towards protein filled diets. An increase of 45.5% per capita from 2002 to The local production has increased 75% and the total consumption has increased 103% in the same years. 4. The introduction of closed-system houses increased farm capacity by 80%. 5. The local broiler industry has the capacity to cover all the local consumption needs. 6. Poultry meat has the highest per capita consumption than all other animal protein sources.

20 7. About 98% of broiler feed ingredients are imported. Feed accounts for 75% of broiler meat production costs. 8. Feed Conversion Ratio (FCR) has been going down tremendously and is nowadays at (1.5). But with the rapid and continuous impact of genetic advances and state -of-art feed manufacturing technology to supply nutrients for optimum productivity, a (1:1) feed conversion seems to be fast approaching. The aquaculture industry has shown that 1:1 FCR is achievable, so why not broilers? 9. Water is a key player throughout the entire poultry production chain being of vital importance from farm to the plant. But with the new technologies and less feed consumption per bird, liters of water used to make 1 kg of poultry meat would go more down in the future.

21 1. The main challenge to local broiler industry is the alarming increase of imported quantities of poultry meat. Jordan imported 40 thousand metric tons of poultry meat in 2012 which made 13% of the total consumption, while 10 years before there were no imports at all. In 2013, the unofficial numbers indicate that imports reached 70 thousand metric tons, an increase of 75% in one year. The drastic increases have been caused by the alleged dumping of broiler meat from Brazil and Ukraine.

22 2. The volatility in the global grains market in the last 10 years. Where we witnessed record high grains prices due to ethanol plants in the United States, China s increasing demand, freight rates climbing, political turmoil (such as the Black Sea Region conflict nowadays), weather (drought), low interest rates ( Investment funds buying commodities), etc 3. The high/rising fuel and energy prices. 4. The bureaucratic regulations by the government which affect the local producers negatively such as: not protecting the local producers, removing tariffs on imported poultry, imposing sales tax on local food products, not investigating the increasing dumped poultry meat from Brazil and Ukraine. 5. The high profit margins added by retailers on local broiler meat prices which reach 25-30%. This has led many consumers to move towards buying cheaper frozen imported poultry meat. 6. Poultry Disease Outbreaks that cause huge losses for Broiler Farmers.

23 1. Investigate the poultry meat dumping from Brazil and Ukraine. 2. Assign quotas for imported poultry meat to protect local producers. 3. Calculate the tariffs on imported poultry meat on the basis of local poultry prices and not on the exporters custom-made invoices (like in the automobile imports). 4. Launch campaigns by local producers and Poultry Producers Association to increase consumer awareness towards local fresh poultry meat, and to encourage local producers towards branding their products. 5. Enable more open channels between government officials and decision makers in the private sector. 6. Allow Grains with slightly higher broken kernels form the Black Sea Region, which does not meet Jordan s Standards to enter the country in the times of high grains prices. (Like what happened in August 2013 where the prime minister gave a permission of metric tons of corn at 8% broken kernels)

24 7. Implement Energy saving technologies and equipments in broiler farms and processing plants to overcome high energy prices. 8. Move towards more Vertically-Coordinated System (known as the integrator) which reduces economic risk and costs to the firm. 9. The implementation of farm-level biosecurity measures to minimize disease risks along with the enhancement of vaccination programs. 10. Launch educational seminars to the smaller farmers to overcome the different challenges.

25 The per capita consumption increased by 45.5%, while the total consumption increased by 103% in the last 10 years. If this trend continues, this is an opportunity for new entrants and the growth of existing broiler farmers in the industry. The redistribution of wealth, increased number of refugees and expats, with the increased number of people moving to the middle class, these have resulted in upward movement in the pyramid of purchasing power and setting per capita consumption to increase further. As a conclusion, the outlook in the coming 10 years in the Jordanian broiler meat sector seems to be bullish, driven by the lower feed conversion ratios and the tight global supplies of red meat. Therefore, it is very important for Broiler Producers to maintain their current market shares and to grow annually at a rate of 7.5% so they do not lose any further ground for imported poultry meat.

26 The Only way to predict the future is to create it Abraham Lincoln Rio de Janeiro