1. Parliament: Portfolio Committee on Trade & Industry
SA Poultry Industry Crisis Impact on the Value Chain FEED, GRAIN & OILSEED
Parliament: Portfolio Committee on Trade & Industry
2 May 2017

2. OUTLINE: ANIMAL PROTEIN – VALUE CHAIN & AFMA PRICE MECHANISMS (PARITY)
MAIZE & OILSEED PERSPECTIVE
IMPACT ON FEED INDUSTRY / FEED COSTING DYNAMICS
IMPACT ON GRAIN VALUE CHAIN
POTENTIAL FOR FEED, GRAINS & OILSEEDS
POSSIBLE MECHANISMS / INTERVENTIONS
CONCLUSION

3. Animal Protein Value Chain
SEED, FERTILIZER, PESTICIDE. (SANSOR)
PRODUCTION (PRIMARY AGRIC, MAIZE, ETC)
STORAGE (AGBIZ GRAIN)
LABOUR AND ROAD TRANSPORT VERY IMPORTANT CONTRIBUTORS THROUGHOUT THE WHOLE VALUE CHAIN
TRADE (SACOTA)
TRANSPORT (RFA)
ANIMAL FEED (AFMA)
PRODUCER (SAPA - POULTRY)
PROCESSOR (SAPA - POULTRY)
RETAIL (CGCSA)
CONSUMER (SANCU)

4. Introduction – VC (Value Chain) - Maize
2015/16
PROCESSING
HUMAN (NCM)
ANIMAL FEED (AFMA)
RETAIL (CGCSA)
PRODUCER (SAPA)
RETAIL (CGCSA)
CONSUMER (SANCU)
CONSUMER (SANCU)
PROCESSOR (SAPA)
Ton
Ton
Ton

5. Introduction – AFMA (Cont.)
NATIONAL FEED VOLUMES – 2015/16
● AFMA members: ± mil tons %
● SA Feedlots (B & S) : ± mil tons %
● Pig Producers: ± mil tons %
● Dairy Farmers: ± mil tons %
● Other manufacturers: ± mil tons %
► Gross Turnover Value of +/- R 50 Billion

6. AFMA – ANIMAL FEED MANUFACTURERS ASSOCIATION
● Represents formal animal feed industry since ● Art 21 Company, voluntary – membership levy. ● 152 Members. 71 Feed Manufacturers 81 Input suppliers

7. Introduction – AFMA (Cont.)

8. Price Mechanism – Parity Prices

9. Price Mechanism – Parity Prices

10. SA Maize Competitiveness - CBOT

11. Price Mechanism – Parity Prices

12. SA Soya Competitiveness - CBOT

13. Yields per commodity – Ton/ha

14. Price Comparison – Maize & SBM
62% of Broiler Diet
24.3% of Broiler Diet

15. Broiler Feed Cost & Price Dynamics
MAIZE = 62% INCLUSION
SOYA = 24.3% INCLUSION
MAIZE & SOY = 67% OF RAW MAT COST
TOT. RAW MAT COST = 92-95% OF PROD. COST
THUS – GLOBAL FEED PRICES DRIVEN BY RAW MAT COST

16. Feed Cost & Price Comparison

17. Potential – Maize Production

18. Potential – Soy Production

19. Potential – Soy Production

20. Impact of Poultry Imports
80%
26% of Local Market
80%

21. Impact of Poultry Imports (Cont.)
DIRECT
Tons
7.3%

22. Impact of Poultry Imports (Cont.)
FEED VOLUMES & EMPLOYMENT LOST

23. Impact of Poultry Imports (Cont.)
LOST OPPORTUNITY
OTHER ton Feed
MDM ton Feed
BIP mil ton Feed

24. Impact of Poultry Imports (Cont.)
IMMEDIATE RISK TO THE FEED INDUSTRTY
ONLY FRESH MARKET TO SURVIFE
BROILER FEED VOLUMES REDUCED BY 3 MILLION TONS
CLOSURE OF 31 FEED MILLS
4 650 DIRECT JOBS TO BE LOST
1.9 MILLION TON OF MAIZE NOT TO BE USED
TON SBM NOT TO BE USED – KILLING
OF SOYA INDUSTRY

25. Mechanisms & Conclusion
BROILER INDUSTRY NEGATIVELY EFFECTED BY DROUGHT AND DUMPING
WTO RANGE OF INSTRUMENTS FOR PROTECTION
NOT ONLY TRADE REMEDIES / ANIMAL HEALTH
SAME TREATMENT FOR IMPORTS as for EXPORTS
MARKET GROWTH and EXPORT DEVELOPMENT
INTERVENTIONS ON POULTRY and COMMODITIES
INTERVENTIONS – VALUE CHAIN APPROACH

26. THANK YOU !!