1. Project (Livestock Supply Chain Management)
By: Muhammad Shahid, Adil Daniel and Fatima Sajid
Course: Food Supply Chain Management (Instructor: Mr. Salman Bilal)
M.Phil Food Safety and Quality Management
Forman Christian College (A Chartered University)
Roll Numbers: , and

2. Project (Livestock Supply Chain Management)
Part By: ADIL DANIEL

3. The UK Livestock System
Project Covers
Characters Of Livestock Supply Chain
Geographical Distribution and Business Structures Of Livestock
Dairy Supply Chain Management
White Meat Supply Chain Management
Red Meat Supply Chain Management
Recommendations for local Market

4. The UK Livestock System
Pillars Of Livestock Supply Chain
Dairy And Dairy Products
White Meat
Red Meat (Beef, Mutton and Lamb)
All these comes mostly from small scale business
Livestock industry is perishable, fragile and vulnerable i.e. needs careful handling/processing to guarantee quality and safety of the final product to the consumer.
Contd..
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-64,65

5. The UK Livestock System
Pillars Of Livestock Supply Chain
Different companies in UK are working to develop a chain
Local livestock market and dealers
Small scale local processors
Delivering and selling to local market, e.g. Smith Field Meat Market(London)
Milk is delivered in a different way because it has short life and vulnerability to deterioration
Primary auction markets and wholesaler's are not involved in Dairy SCM
Collected from door
Then for the processing.
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-64,65

6. The UK Livestock System
Geographical Distribution and Business Structures of Livestock Farms
Dairy Farming is primarily located in western lowland areas of UK because efficient/high quality grassland production is possible.
White Meat and Egg is based on grain feed, so close to grain production areas .i.e. Eastern part of UK, and is usually operated in controlled environment.
Beef and Sheep farms are also dependent on grazing land so it is mostly situated in North and West(Hilly Areas of UK)
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-66,67

7. The UK Livestock System
The Dairy Supply Chain
Dairy Farm: Specialist units, concentrate on milk production
Annual average milk production is 6000 L per cow
Many farms breed their own replacement dairy cows
Calves, a necessary by-product to milk production are either kept and fed on for or sold to other beef veal farmers
Sale of Milk
through medium term contracts to dairy processors
32,000 dairy herds supply milk to 135 buyers out of which only 21 buy almost 89% of the total milk output
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-68

8. Livestock Sector of Pakistan
Pakistan and Livestock
Overview
Why Livestock in Pakistan
Products from Livestock
Livestock as a Business in Pakistan
Geographical Concentration of Major Livestock in Pakistan
Enhancing Livestock Sector Export Competitiveness, Livestock Sector Of Pakistan.

9. Livestock Sector of Pakistan
Overview
Pakistan is blessed with a large population of livestock that is well adapted to the local environmental conditions
In Pakistan more than 8 million rural small and landless farmers raise livestock
Livestock is ideal for attacking poverty in rural areas
livestock makes up almost 55.1% of the agriculture value added and contributes up to 11.6% of the GDP
livestock is growing at an annual average rate of 4% since 2007
The present strategy of the government is to encourage the private sector to invest into the livestock business. “private sector-led development” initiative.
Enhancing Livestock Sector Export Competitiveness, Livestock Sector Of Pakistan, Page no. 2

10. Livestock Sector of Pakistan
Why Livestock in Pakistan
Growth in population
Increase in income levels
Potential for export of livestock
Pakistan in case of livestock is increasing at a rate of about 4% on the other hand crop sector is growing at 3.2%
Enhancing Livestock Sector Export Competitiveness, Livestock Sector Of Pakistan, Page no. 2 and 3

11. Livestock Sector of Pakistan
Products from Livestock
These products serve as raw material for may industries such as leather, processed food, textiles,etc.
These products are also exported worldwide e.g. in case of Gulf export value is US $ million(2011)
Casings exported to Europe were US $ million
This business is growing day by day, factors involved may include halal food products, agreement for trade with different countries.
Meat Preparations
Fur
Butter
Guts
Skin
Butter Oil
Casings
Milk
Cheese
blood
Ghee
Meat
Bones
Enhancing Livestock Sector Export Competitiveness, Livestock Sector Of Pakistan, Page no. 2

12. Livestock Sector of Pakistan
Geographical Concentration of Major Livestock
64% of population lives in rural areas of Pakistan and are mainly involved in agricultural activities which include raising animals for domestic and commercial purposes.
Farmers are connected with market for supply of dairy and livestock via organized/unorganized market mechanism.
Enhancing Livestock Sector Export Competitiveness, Livestock Sector Of Pakistan, Page no. 3,4 and 5

13. The Livestock System
Livestock Value Chain

14. Livestock System
Agribusiness, issue July, September 2012

15. Livestock System The Red Meat Sector Pakistan’s Policy
to achieve 5 percent growth in meat and 8 percent in milk production
Livestock farming to be shifted from subsistence farming to market oriented and commercial farming throughout entire supply chain
Pakistan Economic Survey , p-31

16. Project (Livestock Supply Chain Management)
Part By: Muhammad Shahid

17. The UK Livestock System
The Dairy Supply Chain
Consumption/Utilization of Milk
Seventy percent of
household liquid milk
purchases are made
through super-markets
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-68,69

18. The UK Livestock System
The Dairy Supply Chain
Regulations
Dairy sector is heavily regulated through:
EU’s Common Agriculture Policy
Health and Safety Regulations
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-69

19. Livestock System Pakistan Milk Production System PRODUCTION SYSTEM
NUMBER OF ANIMALS
MARKETING CHANNELS
Small-holder Market Oriented
3 – 5
Retail Shops, Middlemen, Procurement agents of dairy processing plants
Small-holder Subsistence
1 – 3
Milk not marketed due to lack of regular access to market. Markets processed goods like desi ghee
Per – Urban
livestock with 90 % buffaloes and 10 % cattle
Direct sale to retail shops, contract with the middlemen, sales to consumers
Rural Commercial
More than 50
(90 % buffaloes and 10 % cattle)
Retail Shops, Middlemen, Procurement agents of dairy processing plants
Agribusiness, issue July, September 2012

20. Livestock System Pakistan Milk Production System PRODUCTION SYSTEM
NUMBER OF ANIMALS
MARKETING CHANNELS
Small-holder Subsistence
1 – 3
Milk not marketed due to lack of regular access to market. Markets processed goods like desi ghee
Small-holder Market Oriented
3 – 5
Retail Shops, Middlemen, Procurement agents of dairy processing plants
Rural Commercial
More than 50
(90 % buffaloes and 10 % cattle)
Retail Shops, Middlemen, Procurement agents of dairy processing plants
Per – Urban
livestock with 90 % buffaloes and 10 % cattle
Direct sale to retail shops, contract with the middlemen, sales to consumers
Agribusiness, issue July, September 2012

21. Livestock System Pakistan Milk Production System
Value Chain Analysis of Livestock Sector, District Vehari, Report, P-41-43,

22. The UK Livestock System
The White Meat Supply Chain
Include pigs, poultry, fish and eggs
Most industrial in nature because of two factors
Consumer demand for uniform and cheap products
Technological possibilities available
Breeding and feeding technologies; productive poultry with very high feed- conversion rates
Processing of products into various final consumer lines
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-70

23. The Livestock System Farm Supply Chain

24. Butchers/Shopkeepers/Retailers Hotels/Bakery/Others
Livestock System
Chicken Supply Chain of Lahore
Tolinton Market
Sherawala Market
Direct Suppliers
Dealers / Wholesalers
Butchers/Shopkeepers/Retailers
Retail Stores
Hotels/Bakery/Others
Consumers
An Empirical Study of Meat Supply Chain: A Case Study By Hamid Jalil

25. Livestock System Chicken Supply Chain

26. Livestock System Fish Supply Chain of Lahore - Pakistan
An Empirical Study of Meat Supply Chain: A Case Study By Hamid Jalil

27. The UK Livestock System
The White Meat Supply Chain
Offshore Competition
Domination of Danish, supplies of bacon and ham to UK market
Although pigs produce both bacon and ham as well as pork but UK is only 50% self sufficient in these products (Due to animal welfare - cost of concern/preferences and economy strength reasons)
Both production and curing processes are different for each product
Danes, especially have tented to concentrate their production and processing capacity on the production of quality bacon and ham
Further competencies include: Relative price, established supply chain network, connections and marketing activities
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-70

28. The UK Livestock System
The White Meat Supply Chain
Strategic Standing
Although there is existence of Common Agriculture Policy which Provide border protection against outside the EU supplies but support for intensive livestock has been small for following good reasons:
If incentive/support offered then it may lead to unsaleable surpluses
Due to existence of resources (especially land) and no significant lag between decisions to expand production and capacity to produce more these sectors respond very quickly to price incentives
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-70

29. The UK Livestock System
The Red Meat Sector
Traditionally:
Line of communication and information flow were informal
Hill farming (lowland breeding livestock): rely on same farms for their replacement animals and purchasers use autumn auction market
Local butchers were associated with local slaughterhouses and rely known farmers for supplies, selling to known families and households
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-72

30. The Livestock System Traceability Tracesafe Ltd. Case
Tracesafe is a farmer owned and controlled private limited company
Tracesafe Cattle Management System (ISO Certified) since 1996
Parent selection, stages of rearing, production to receipt of carcasses (processor to butcher)
History of individual cut to be traced back to animal of origin
Specialist retailers and quality restaurants who afford the additional cost
Serve as a quality assurance stamp and endorsement of traceability
Supply Chain Management, Vol 3, No 4- Case Study

31. The UK Livestock System
The Red Meat Sector
Development:
Changing shopping, food storage, preparations eating habits and growth of super markets resulted in concentration of retail (most developed) outlets and decline of traditional local butcher
Centralized buying, processing, distribution and quality controlled supplies
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-72

32. The UK Livestock System
The Red Meat Sector
Development:
Selling of more traditional cuts being replaced by sale of more value- added meats and meat product ingredients
Integrated production and marketing throughout the meat chain to deliver consistent quality of product required by market
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-72,73

33. Livestock System Case Study (Kobe Cusine)
Kobe Cusine brand is managed by Wagyu Business Unit, which is one of the five units within Australian Agriculture Company-Food Group
Case Study, Supply Chain Management at Kobe Cuisine, MAL Meat and Livestock Australia, Issue 1/2005

34. Livestock System Case Study (Kobe Cusine-Flow of Materials)
Cattle are purchased directly from Wagyu cattle suppliers who are paid 10 Dollars premium in order to keep record and integrity Of the breed
Cattles of age 12 and 18 months enter the Aronui Feedlot Live weight data are feed on the database as cattles are feed On natural grain for 400 days. Feeding capacity is 6,000 heads.
Slaughter and processing is done at two abattoirs (95 % at Stanbroke, 5 % at Kilcoy)
Products are marketed directly to end users (20 % to each of Japan, USA, South Korea and Hong Kong)
Case Study, Supply Chain Management at Kobe Cuisine, MAL Meat and Livestock Australia, Issue 1/2005

35. Livestock System Case Study
(Supply chain of Kobe Cusine - Communication)
Case Study, Supply Chain Management at Kobe Cuisine, MAL Meat and Livestock Australia, Issue 1/2005

36. Livestock System
Case Study (Supply chain Communication at Kobe Cusine)
Supply chain communication has a vital role in management
Communication in up and down the supply chain; competitive advantage
Improved knowledge of chain partners and product understanding
Eliminated guess work by précised objective data
Improved quality of feedback, continuous improvement of processes
Relevant data to help make informed decisions for improving cattle performance
Case Study, Supply Chain Management at Kobe Cuisine, MAL Meat and Livestock Australia, Issue 1/2005

37. The UK Livestock System
The Red Meat Sector
Retail Market
UK has amongst the lowest per capita consumption of beef and veal in the western world
Red meat categories experience fall in consumption whereas poultry saw a strong growth
Supermarkets handle 55% sale, and others include independent grocers, freezer centers, farms shops and market stalls
Farm shops and farmers’ markets are recent trends
Independent butchers share decline from 47% to 25%
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-73

38. Livestock System The Red Meat Sector (Marketing System in Lahore)1
big shopkeepers having 5% market share who purchase animals directly from other animal markets outside the city and sell the meat at their shops in Lahore 2
meat shopkeepers having 30% market share
purchase animals from local animal market (KotKamboh) 3
comprising 55% of total meat sale is wholesale marketing by middlemen
purchase slaughtered animals from slaughterhouses on wholesale rates for further selling 4
Suppliers which has the remaining 10% of market share
They buy meat from slaughter houses and wholesalers to supply it to hotels/restaurants
An Empirical Study of Meat Supply Chain: A Case Study By Hamid Jalil

39. The UK Livestock System
The Red Meat Sector
Policy
Earlier there was existence of
Common Agriculture Policy
Charge of taxes on import
Export subsidies
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-75

40. The UK Livestock System
The Red Meat Sector
Policy
World Wide Change
Uruguay Round Agreement on Agriculture
General Agreement on tariffs and trade
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-75

41. The UK Livestock System
The Red Meat Sector
Policy
Now facilitation in form of
Environmentally friendly land use practice
Animal friendly production system
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-75

42. The Livestock System Partnership Management
As far as livestock industry in general and beef industry in particular is concerned following are the benefits which might be expected to result from partnership management:
Improved market access
Improved communication
Higher profit margins
Great discipline
Supply Chain Management, Vol 3, No 4- Case Study

43. The Livestock System Tesco Producer Club - Case Problem
Producers think that retailers have hidden agenda to tie them in and then cut the price
Solution
Producer club – communication with farmers on matters of mutual interest
Tesco to obtain all its beef, lamb and pork from its producer clubs
Farmers who join are not under contract, but Tesco offers competitive prices and club members are assured an outlet for their stock, in return farmers to commit 50 % of their stock
Premiums for good quality carcasses
Supply Chain Management, Vol 3, No 4- Case Study

44. The Livestock System M & S and Scotbeef - case
Originally Scotbeef is a family-run abattoirs and meet packing business, initially was established to supply its own retail butchers
Scotbeef supplies all of its fresh beef to M & S
M & S and its shoppers can be confident about quality and safety of the beef
Scotbeef become an exclusive supplier to M & S due to its ability to trace beef back to the farm
Scotbeef pay higher price for selected farm cattles
M & S Scotbeef and farmers have more stable market, reliable and comfortable relationship, plan more effectively, investment decisions taken more easily.
Supply Chain Management, Vol 3, No 4- Case Study

45. The Livestock System

46. Project (Livestock Supply Chain Management)
Part By: Fatima Sajid

47. Red meat supply chain
The United States is the largest beef producing country in the world with annual beef production of 12 million metric tons
US at third place with total beef exports of 1.0 million metric tons
Pakistan’s current red meat production is 3.2 million tons with 1.76 million tons of beef and million tons of mutton produced during
Despite the large livestock resources, Pakistan has not been able to exploit those potentially and make its mark in the international meat trade.
The major reasons are unavailability of indigenous meat breeds, lack of improved animal husbandry and modern practices regarding animal fattening for meat purpose, absence of well equipped, modern and certified slaughterhouses and meat processing units.
Argi Business Quarterly, Pg#4, JULY - SEP 2012

48. Technical complexity of the supply chain
Auction
trade traditionally happens through livestock auction markets, which also deal in breeding stock, between regular buyers and sellers, and even via electronic auctions,
Depends on establishment of reliable quality and grading systems
Market
variety of types, grades and conformations
(breeds and cross-bred animals) fed through four different feeding regimes, producing three different carcass grades
Slaughter
hung and matured after slaughter as a carcass, for the necessary biochemical and biophysical changes to occur to produce tender and tasty meat
Depending upon the grade
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-75,76

49. Technical complexity of the supply chain
Cutting
breakout of the carcass into joints and cuts and the all-important by-products, offcuts and offals
final consumer products
Distribution
retailed through a variety of different outlets such as traditional butchers, supermarkets, corner stores and independent grocers, catering establishments
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-75,76

50. Organization and structure of the supply chain
some 300 Livestock auction marts are operational in the UK still account for over 50% of finished cattle sales and 70% of sheep sold live weight.
13 million ‘cattle units (cu)’ (one cattle unit is equivalent to one cow, or seven sheep or three pigs).
Decrease in slaughter
The massive FMD outbreak of 2001–2002 resulted in the slaughter of ‘only’ 6 million animals in total (mostly sheep) versus a normal annual kill of about 32 million animals.
Increase in UK sheep population
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-77

51. Meat price
According to DEFRA (2001b), meat price changes (both increases and decreases) are fully or largely transmitted through the supply chain from producer to retail
retailers try to reduce the variability of retail prices called ‘levelling’ behaviour
overall there was little dispute that in the wake of the BSE crisis,
costs in the supply chain rose significantly and the overall value of the carcass fell because of the reduction in the value of some of the by- products. At the same time, consumer demand for beef and lamb fell, making it impossible for retailers to raise prices
Food Supply Chain Management, Edited by Michael and Paul, Blacwell Publishing, P-79

52. The Meat Value Chain
The meat value chain in Pakistan may be divided into five segments namely;
a. Inputs used in breeding of the livestock
b. Breeding of live animals meant for procuring meat and meat products
c. Marketing of animals bred for obtaining meat and meat products
d. Processing of meat products and value addition
e. Marketing of meat in
• Domestic market
• International markets
ENHANCING LIVESTOCK SECTOR EXPORT COMPETITIVENESS REPORT

53. ENHANCING LIVESTOCK SECTOR EXPORT COMPETITIVENESS, REPORT

54. Supply Channels Channel 1
The first channel involves the rural farmer selling80% of the meat animals to the village beopari,345% to the live animal market and 15% to the rural butchers.
Channel 2
The second channels deals with the beopari selling 98% of the meat animals in the live animals market and2% to the rural butchers
Channel 3
52% of the meat animals are purchased by the contractors, 15% by the traders/
wholesalers, 31% by the urban butchers and only 2% by the rural butchers
Channel 4
27% of the meat animals to traders/wholesalers, 1% to the exporters and 72% to the urban butchers.
Channel 5
16% of the meat animals are purchased by the slaughterhouses from the traders/wholesalers, while 84% are purchased by the urban butchers

55. (Livestock Supply Chain Management)
Recommendations for Local market
Part By: All Group Members

56. Recommendations

57. Recommendations Meat Animals Production:
The provincial governments urgently need to establish model meat production farms based upon feedlot fattening in the concentrated areas
Clustering to organizing and formalizing the livestock sector
Government owned livestock farms should not be privatized
To ensure increased level of investment in the meat animal production
ENHANCING LIVESTOCK SECTOR EXPORT COMPETITIVENESS, REPORT, P-60

58. Recommendations Training and Awareness of Stakeholders
The government must encourage farmers/ entrepreneurs in the country through its various business support organizations and Small and Medium Enterprise Development Authority (SMEDA) to undertake livestock farming for meat production as a primary source of income besides crop and milk production.
Awareness campaigns on development of the livestock sector must primarily be spearheaded by the government primarily
Training programmes for the government functionaries are also required to be conducted.
ENHANCING LIVESTOCK SECTOR EXPORT COMPETITIVENESS, REPORT, P-61,62

59. Recommendations Meat Processing Industry Recommendations
The Pakistan Livestock and Dairy Development Board needs to carry out detailed planning needs to ensure linkages between the livestock markets, slaughterhouses and the processing facilities for livestock by-products.
Meat processing zones as well as export meat processing zones should be established near major cities of the country. These zones should be equipped with facilities required by the meat and meat products manufacturing and processing units
To encourage value-addition in the industry, investors should be provided soft loans to
establish processing facilities and should also be offered export refinancing credit schemes to
support the international marketing of the meat products
ENHANCING LIVESTOCK SECTOR EXPORT COMPETITIVENESS, REPORT, P-68

60. Recommendations Generating Exportable Surplus Recommendations
To address investment related issues in the value added livestock export sector, government must position meat production as profitable business and provide facilities to develop this sector in the shape of export meat processing zones facilitate setting up of modern slaughterhouses
the government needs to encourage competition in the domestic airline industry to bring down freight cost
ENHANCING LIVESTOCK SECTOR EXPORT COMPETITIVENESS, REPORT, P-69

61. THANK YOU !