• Wednesday, April 17, 2024
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BusinessDay

High feed cost to shrink Nigeria’s poultry output

Chi Farms, Aviagen strengthened collaboration in poultry production

The output of the Nigerian poultry industry risks dropping this year owing to the jump in maize prices – a key input in the production of livestock feeds.

Nigeria is experiencing a shortage in maize supply owing to the intensifying effects of climate change, worsening insecurity, and several disruptions in the food supply chain. As a result, there has been a sudden and speedy rise in the prices of maize.

Currently, the average prices of maize in the country have surged by 110.9 percent to N480,000 per tonne in August from N227,500 per tonne in June, the highest monthly surge on record, according to the Poultry Association of Nigeria.

While at the international market, a metric tonne of maize sells for $216.82 (N194,400), using the current black market exchange rate, according to data from the International Grain Council. This shows that local maize prices are N285,600 higher than the current international price.

“In the last five weeks prices of maize jumped by over 100 percent and this is hurting the industry badly,” said Onallo Akpa, director general of the Poultry Association of Nigeria.

“I have been operating in the industry for over three decades and it hasn’t been this bad. The industry is plummeting daily and this will definitely shrink its output and contribution to GDP in 2023,” Akpa said.

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Feed constitutes 70 percent of the cost of production for poultry farmers and any hike in the prices of maize and soybean will push up farmers’ production costs.

The country’s livestock subsector, which is dominated by poultry, contracted by 30.57 percent in the first quarter of 2023 from 5.55 percent in the corresponding quarter in 2022.

On a month-on-month basis, it contracted for the second consecutive quarter after shrinking 1.59 percent in the fourth quarter in 2022, thus taking the sector into a recession.

Rotimi Dairo, a poultry farmer in Ikorodu, Lagos, could barely find sleep every night as he tries to figure out what to do next after shutting down his poultry farm over the recent hike in feed prices.

“With the current situation in the country, one cannot afford to stay idle without any source of income,” he said. “But for me it is better I shut down my poultry farm to stay idle than incurring losses and plunging into debt. Now, I keep thinking of what other business I can do to sustain my family and this is giving me sleepless nights.”

Dairo, who has been a poultry farmer for 12 years, could no longer afford to feed his 5,000 layer birds and additional 1,000 boiler birds in his battery cage farm regularly as feed prices doubled.

His situation is similar to what millions of poultry farmers are currently experiencing across the country.

Also, the declining demand for eggs, high cost of feed, naira volatility and accelerating inflation is forcing many farmers to shut down and their employees losing their source of livelihoods.

The situation will result in a massive loss of jobs in a sector that is creating many jobs in the country, according to experts.

According to Akpa, nearly 30 percent of poultry farmers have shut down their operations, and those still operating are incurring losses.

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Similarly, the country relies on imports for its soybean and micro ingredients – vaccines and drugs for birds, and with the recent naira devaluation their prices have tripled.

Naira exchanged at 510 to a dollar at the black market pre-devaluation but skyrocketed to 914 per dollar as of Wednesday.

BusinessDay’s survey at some markets in Lagos shows that a 25kg bag of layer marsh now sells for N7,800 and N8,000, depending on the brand, as against N6,000 in January, while growers mash now sells for N7,000 as against N6,000.

“The situation on ground currently is the worst I have seen since I started my poultry farm over 30 years ago. How can maize be more expensive than soybean that we are even importing bulk of our needs?” Dayo Gawti, chief executive officer at Fdot Farms, Kwara State, said. “This is happening in a period where demand for eggs and chicken is fast declining owing to inflation.”