Poultry farmers hit as feed prices, other inputs rise steeply

. . . Exchange rate differential entices maize, soya farmers to export amid scarcity.

The population of Nigerian poultry farms is fast dwindling, as most farmers cannot feed their birds on account of the scarcity and high prices of feeds and other inputs.

“A lot of farms are being closed down because so many people cannot afford to feed their birds,” Onalo Akpa, director-general, Poultry Association of Nigeria (PAN), told BusinessDay by phone.

“If you have a (poultry) farm and you cannot feed your birds, then you better shut it down.” said a rather agitated Akpa.

This situation has likewise raised the prices of poultry and eggs in the local market, which would have given smuggled products a big advantage but for the sharp drop in the value of the naira against the US dollar.

Prices of starter feeds have risen sporadically in the last 12 months. A bag of Vital Feeds, which sold for N2,800 one year ago, currently goes for between N4, 300 and N4,500 in major markets in Nigeria. A starter feed, which is produced by Bridgewell, sold for N2,800 about 12 months ago. However, its price in today’s market has risen to between N4,400 and N4,700 in wholesale and retail markets. Similarly, growers feeds selling for N2,000 and N2,200 12 months ago, now goes for between N3,400 and N3,600 today.

Prices of maize and soya beans which serve as alternatives for grower feeds, have increased by over 100 percent, while inputs such as vaccines are either outrightly unavailable, or very expensive, experts say.
The situation is likely to worsen the country’s poultry deficit, which has been estimated at 60 million birds.

The Agriculture Promotion Policy document released by the Federal Ministry of Agriculture indicates that Nigeria’s annual chicken consumption is 200 million birds, while supply is 140 million birds.
The deficit of 60 million birds is filled by illegal imports, which enter market at lower price points than domestic producers.
“The situation will only get worse,” Olatunji Adenola, President, Maize Association of Nigeria, told BusinessDay. “As the peak for maize season is going down, the price of the little which is available goes up, as many people are struggling for it.

“Since we had a shortage last year and the harvest did not cover enough, of course the shortage will surface again this year. December, January is the peak for processing of maize, and once we get to that peak, especially March, the problem will come again.”
“The planting we did last year April and May should have been substantial enough to keep prices stable before planting another one. And we failed to achieve that,” said Adenola.

According to Raphael Nwaenigwe, managing director of Kenfrancis Farms Limited, based in Anambra State, the demand for poultry feeds is currently low, as many farmers are becoming disenchanted with high prices of commercial feeds.
“The price of feeds rises each week. The producers are saying that the cost of raw materials such as maize is high,” Nwaenigwe said.

Emmanuel Ijewere, Vice President, Nigeria Agri Business Group (NABG), who is also CEO, Best Foods Limited, explained that the poultry industry’s biggest problem today, is availability of feeds, and two biggest ingredients are maize and soya.

“While both maize and soya enjoyed a boom this past year, maize production was hampered by an attack of armyworms. Also, the exchange rate differential resulting from a weaker naira, has seen many farmers in the north preferring to sell their produce to Niger, Cameroun and other neighbouring countries, who themselves unfortunately suffered some level of drought,” said Ijewere.

The weak naira has seen many farmers preferring to sell their maize and soya to neighbouring countries so as to earn foreign currencies.

“In the north, they are exporting maize so they can earn foreign currency. What is not sufficient for us is being sold outside,” lamented Adewale Tijani, CEO, In Domino Farms.

“But, can you blame them? If I was also in their shoes, I would do the same,” Tijani said.

As Ijewere explained, the marginal operators in the poultry industry have packed up because they could not afford the increase in prices of feed, especially since the average person will not want to pay beyond the price they would ordinarily pay for chicken.

Furthermore, the few operators left have been tottering and the price of chicken has gone up considerably, further threatening food security.
Tijani expressed the view that the situation is not entirely one of feed scarcity, rather, the fact that prices have gone up astronomically and most poultry farmers find it difficult to cope.
“A kilogram of maize presently costs N145 but it was sold for N70 (less than half) this time two years ago,” said Tijani.

He further observed, “because the price of maize, which is the major input has doubled, the price of complete feeds has gone up. Many farmers cannot afford to buy these expensive feeds.”

He explained, “there are some foreign inputs such as drugs, for which Nigeria refuses to develop its capability to produce. And importing them has become difficult because of the exchange rate.”

But analysts say the difficulties in the poultry sector also represent an opportunity.
“It is necessary is to encourage more farmers to cultivate and grow maize, especially the small holder farmers, and also to encourage a lot of small scale industrial farmers to also engage in maize cultivation with the introduction of various varieties of hybrid seeds to be able to farm so that it becomes much more economical to farm,” Olusegun Falade, head, Agric inputs, Flour Mills of Nigeria told BusinessDay.
This is corroborated by Michael Aderohunmu, CEO, M&K Agro who also said “There are lots of opportunities in maize cultivation today because of the high demand. Major producers of feed mills are desperately in need of maize to mix with the poultry feed so I think that one of the opportunities that can be derived (which I am even trying to put to practise on my end) is to bring farmers together to produce and cultivate more corn to be supplied to producers such as feed mills.”
Adenola also said “If a farmer with 10 hectare capacity gets help to increase (to maybe 20), and if every other farmer increases like that, it is what creates marginal increase in production to solve the present situation.”

 

CALEB OJEWALE