The poultry industry consists of three separate sectors: (i) The day-old chick supply industry (ii) The broiler industry, and (iii) The egg industry.

Broiler chickens are raised for meat i.e. fresh, frozen or value added (e.g. chicken fingers, saucy steaklets or polony). Egg layers or dual-purpose chickens are used for the production of eggs (they are lighter in weight than broilers, and so fattening cockerels from this second category with balanced feed bought in a bag is not as economically viable as doing the same with broilers).

International business environment

The biggest chicken meat producing countries are the USA, China and Brazil. Brazil and the USA are the two biggest exporters of chicken, together accounting for about two-thirds of global chicken exports. For international projections and statistics find the latest OECD-FAO Agricultural Outlook document at www.fao.org.

South Africa: imports and exports

In 2017 the Americas, that is, Brazil and the United States, were the key suppliers accounting for more than two thirds of the imports. The United States exported more than 87 000 tonnes of poultry to South Africa, up more than 200 percent from 2016 and second only to Brazil’s 337 476 tonnes (SARS, 2018). Trailing the Americas was Europe which accounted for 15 percent of the market share (Agbiz, 2018).

South African producers’ ability to compete with imported cuts will depend on the extent to which they are able to maximise carcass value going forward. Individually Quick Frozen (IQF) pieces represent the bulk of the domestic market, but imports of bone-in portions are likely to continue and strategies that reduce exposure in the IQF market will reduce the impact of such imports on profitability. The industry is also exploring the possibility of growing exports, a strategy that has been very successful for beef producers in recent years. In order to do so, competitiveness in the global context is critical.

Source: BFAP BASELINE | Agricultural Outlook 2017-2026 p 77

African business environment

Africa, which imports nearly 83% of the food it consumes, has a real chicken and egg problem. The continent is caught between pressure from imports in some countries and an inability to meet demand in others.

Africa’s chicken crisis is an expression of overall weaknesses in its agricultural system. If Africa cannot raise its grain production it cannot expect to do well in increasing its chicken output.

The solution to Africa’s chicken crisis lies in upgrading agricultural systems overall. Here are the major limitations:

  • Low-cost, high-quality feed. Expanding feed production involves investing in grain production, especially corn and soya. Research to increase efficiency and expand the range of feed sources will go a long way in helping to upgrade overall system.
  • The lack of starter stock (chicks and broilers bred specifically for meat production). Improvements in this area will require better breeding and extension programs akin to those needed for crops. Nearly 84% of chicken in Kenya is based on local breeds that have low levels of efficiency in converting feed into meat.
  • Disease control. Disease control is a problem for both crop and livestock producers and requires more investment.
  • Poor infrastructure (especially energy, transportation and water supply systems) is a major barrier to the expansion of chicken production, especially in rural areas. A lack of cold storage facilities forces farmers to keep feeding their chickens instead of slaughtering and refrigerating them. They generally transport live chickens to markets, which raises logistical costs and increases concerns over disease transmission.
  • The lack of credit for producers. Countries that provide credit for crop producers to purchase seed and farm input have the opportunity to extend their incentives to chicken production. Most African countries lack such systems and it is unlikely that they will introduce them for poultry farming if they do not have them for crop production.

So far Africa can hardly feed its people. But even worse, it cannot feed its chickens so that it can feed its people. The chicken crisis is yet another reason why Africa must focus on getting its agricultural act together. The crisis is a warning to African leaders: they need to wake up with the chickens and act in time.

Source: excerpts from a piece written by Calestous Juma, professor of the Practice of International Development, Harvard University, at  http://ewn.co.za/2016/09/21/OPINION-If-Africa-learnt-to-feed-its-chickens-it-could-feed-its-people

Local business environment

The website of the South African Poultry Association (SAPA), www.sapoultry.co.za, is a first-stop about what is happening in the country. Industry profile, statistics and other information is available.

The poultry industry, with a total value of R46 billion, is the biggest agricultural sector in South Africa (SAPA, 2018; BFAP, 2017).

In addition to its contribution to the nation’s Gross Domestic Product, the South African poultry industry remains an important contributor to job creation and employment opportunities, both in the formal and informal sector, with in excess of 80% of the industry consisting of SMMEs (Small, Medium and Micro Enterprises). Chicken also remains the most affordable source of protein. How to balance the imperatives of producer and job creator vs more affordable food?

Poultry producers in South Africa have been squeezed over the past few years. Energy and feed costs, and inexpensive imports have seen producer ranks thinned.

South African producers compete well on a technical basis, but are challenged when costs are included, a study by BFAP and Wageningen University in the Netherlands found (BFAP, 2017). The bulk of the increase in imports has been very specific cuts, imported duty free from the EU. These cuts of EU origin represented 38% of total imports in 2016 (the comparative figure was 2% in 2010). A second area where local producers are at a disadvantage is that competitors like the USA, Brazil and Argentina are net exporters of key feed materials like maize and protein meal and so have a significant advantage in the cost of feed (BFAP, 2017).

The poultry industry will benefit from a record South African maize harvest, and despite the challenges above continuing, BFAP projects increased profitability but not at levels previously seen, specifically 2004.

Strategies to invest in the soy/yellow maize sectors and to increase processing capacity in the country could see input costs reduced, and production increasing (see notes on APAP under heading 7).

Further reading:

Coombes, C. 2017, May 30. Protection of poultry industry is key to short-term survival, but not the long-term answer. Bizcommunity. Available at: www.bizcommunity.com/Article/196/358/162570.html

Emerging farmer points of interest

Current situation:

  • It is difficult for small farmers to enter into the retail supply chain, since it is looking for suppliers who can guarantee the demand at an acceptable price and quality. While some smaller producers can match the price and quality criteria, they are too small to supply the needed quantities.
  • At present, emerging farmers sell their eggs to black-owned shops, spaza shops, butchers, hawkers, restaurants, hotels and to a small extent to white traders (e.g. cafes).

Future Market Growth:

  • The African population represents the best market opportunities for emerging farmers.
  • Distribution channels to the low-income groups need to improve and are doing so. The distribution of eggs to township spazas and door-to-door sales must be promoted.
  • Catering companies, hawkers buying in bulk from producers, co-operatives, contracting and government tenders all represent possible markets.
  • Many farmers do not adhere to the grading requirements as stipulated by legislation. For small-scale farmers to penetrate other markets it is important to begin following the regulations. Training in grading and packaging can open new markets for small-scale producers, especially on government tenders.

Co-operative Marketing:

  • Black-owned co-operatives could be a vehicle for penetrating the formal marketing channels in South Africa.
  • Through co-operatives, the produce of farmers can ensure larger supply of quantities, create a brand name, and have “muscle” to negotiate prices on behalf of farmers. The function of the co-operative can be to look for markets for members and also assist in preparing the produce (grading and packaging) and marketing it.

Possible Strategies:

  1. Contracting: Small-scale farmers can enter into a contract with a processing or a packaging plant, or an integrated company to supply a stipulated number of eggs or chickens at a time. This provides a steady market for the small-scale farmer.
  2. Supply to Consumers: Consumers can buy chickens or eggs at the farm stalls. The farmer can employ a door-to-door sales representative to take orders in the township.
  3. Supply to Hawkers: Eggs can be sold to hawkers on a regular basis. Since most hawkers have a transport problem, the farmer can entice them by delivering the eggs at their sheds.
  4. Supply to Hospitality Trade: Supply to hotels, restaurants, caterers, township bed & breakfast, guest houses and shebeens. There are many tourist initiatives and developments in the townships that need to be catered for.
  5. Supply to Township Cold Storage Distributors: some entrepreneurs have positioned themselves in the townships and other former black areas to distribute eggs. The concept here is “to bring the product to the consumer”, to reduce the transport constraint. Small-scale farmers can supply these distribution centres.
  6. Supply Through Tendering: Every year tenders from the government departments (e.g. correctional services, hospitals, etc.) are published for the supply of chickens and eggs. Small-scale farmers stand a change because of the system designed for the previously disadvantaged individuals, provided they can meet the price, quality and quantity requirements.
  7. Supply Mining Houses: Mines have kitchens and hospitals that are serviced by caterers (in-house or as an outsourced service. Some of these mines are now owned by black empowerment groups who can be lobbied to empower small-scale farmers. Before starting a chicken or poultry venture, check on any applicable regulations/legal considerations with your local authority or through associations listed in this chapter.

Source: the Agricultural Marketing Extension Training Paper 9 at www.daff.gov.za

For the newcomer

To make money with poultry, be prepared to work hard! Chickens must be checked, fed and given water every day. If you are farming with layers, you must collect eggs regularly.

Ask yourself:

1) Do you want to produce eggs or meat?

  • Profit margins on eggs are small, but it can work if you have a good marketing strategy.
  • Adding value to your eggs is one plan e.g. sell boiled eggs at a taxi rank.
  • Layers will provide eggs almost every day, and after a year you can sell them for replacements
  • For meat, the three ways to market are: contract growing (produce chickens for large companies), live chicken sales, and frozen chicken sales. With the last one, you will need special facilities beyond the budget of most beginners, but if you can secure a contract, then this will be worth it.

2) Where is your market? Who are the customers?

3) At what price can you sell and still make a profit?

4) Can you produce enough to secure a contract?

5) Do you have all the information you need?

Infrastructure

  • Do the premises meet your municipality’s zoning specifications?
  • Do you have access to fresh water and electricity?
  • Do your neighbours mind having a chicken business next door?
  • Do you have space on the premises for future growth?

Various tips

  • Make sure any training you go for is practical
  • Buy day-old chicks (rather than breeding them) and grow them up for slaughter
  • Don’t raise your own chickens if you are producing eggs; it will be cheaper to buy hens that are near the stage of laying.
  • Breeding day-old chicks for sale can be done if you have a large market, but otherwise leave this to the large companies who specialise in this.
  • Big producers use specially selected breeds to produce on a large scale, and this is done in strictly controlled facilities that cost millions of rand. Far more suitable for smaller producers are indigenous breeds (e.g. Boschvelder) or old standard breeds like the Australorp, Potchefstroom Koekoek, Rhode Island Red or New Hampshire. These are hardier and more disease resistant. They are also ideal for the informal market and the live-chicken market.
  • Feed for your chickens will be the most expensive running cost. If you buy feed along with other farmers you can negotiate a better price.

Sources: A series of articles for beginners in the April 2011 editions of Farmer’s Weekly.

One surprise finding of the BFAP 2016-2025 Baseline is that in a time of great challenge for commercial poultry producers, small-scale production in rural areas “can be quite profitable whilst playing an important role in the market” (BFAP 2016, p 12). Also find the discussion ” Small-scale poultry production – how small is big enough” (page 89). The document can be downloaded at www.bfap.co.za.

Samuel and Zoleka Joka run one of the successful small-scale broiler operation in Bumbane village, on the outskirts of Keiskammahoek. Below are some of the points included in the advice given by the Jokas and Fumanekile Ngqokweni, the extension officer:

  • Success is linked to the ability to access start-up capital and skill to grow broilers successfully.
  • The new farmer has to renovate or build adequate facilities, buy equipment (e.g. heaters, self-feeders, drinking pans, sawdust), feed and chicks. This is quite a capital outlay before you get anything back.
  • Samuel stressed the importance of training
  • He advises beginners to start small – say 50 chicks – and build volume with experience, thereby minimising the risk of initial failure
  • Disease control is vital. Growers can radically decrease the probability of disease through correct management e.g. ensure clean water and watch the general cleanliness of production areas (disease can spread through contaminated drinking water, food and chicken waste).
  • Before a new batch of chickens is introduced to the pen, clean it thoroughly and rest it for at least ten days.
  • The temperature should be kept at about 30oC in the first two weeks.
  • There must be significant air circulation during hot periods. During cold times, heat should be generated using heaters and infrared lamps.
  • Wood shavings should be evenly distributed in the pens: this ensures cleanliness and the retention of heat. The Jokas have two structures: a large rondavel with large windows where they rear their chicks up to four weeks, after which they are transferred to a large wooden shed fitted with canvas flaps (that can be lifted) and ceiling fans to ensure circulation.

Source: Adapted from the article “Broilers transform Keiskammahoek” at www.farmersweekly.co.za.

National strategy and government contacts

In the Industrial Policy Action Plan (IPAP) 2018/19 – 2020/21, poultry features in the Key Action Programmes. The intention is “to work with stakeholders and investors to unlock constraints in the poultry value chain that currently inhibit new investments, deeper localisation and inclusive growth”. Find the document at www.thedti.gov.za.

The “Poultry/Soybeans/Maize Integrated Value Chain” is the first of the ten interventions set out in the Agricultural Policy Action Plan (APAP). Poultry production is the largest agricultural sector. The sector is identified as one having import substitution value.

  • The price of animal feeds and energy are identified as challenges, dumping and/or oversupply of imports is another. Problems around smallholder participation are identified, such as abattoirs and hatcheries not being well located for these farmers.
  • The “most important intervention” is to support the domestic soybean and yellow maize industries with the aim of lowering animal feed costs. Suggestions include poultry producers receiving discounts on electricity usage, and that start-up capital incentives for solar energy be prioritised for smallholder producers.
  • Outputs envisaged by APAP for the near future include: (1) A National Poultry Research and Development Programme to “design and develop alternative energy efficient poultry production systems”. (2) A National Management Plan to “develop integrated national surveillance and monitoring programmes for poultry diseases of importance (e.g. Avian Influenza and Newcastle Disease)” (3) A National Poultry Training Programme involved in capacity building for rural youth in poultry production and processing; and for extension officers, state veterinarians and para-veterinarians to support newly established poultry producers.

“The dti and Astral Foods supported a R 200 million chicken feed mill to boost South Africa’s agriculture sector. The dti has contributed R28 million towards the 40,000 ton per month mill, with the remainder of the costs being undertaken by Astral Foods, South Africa’s largest poultry producer”.

The Poultry Sector Development Plan is the seventh of eight Key Action Plans in the agro-processing part of the Department of Trade & Industry’s Industrial Policy Action Plans (IPAPs) for 2015/16 – 2017/18. Find the document at www.thedti.gov.za.

Source: the DTI’s IPAP 2015/16 – 2017/18 document

  •  For contact details and information on the different Department of Agriculture, Forestry and Fisheries (DAFF) directorates, find the “Branches” option at www.daff.gov.za.
  • The document  “Guidelines  on key requirements for governments markets  – bread, eggs and dairy products” can be found on the Directorate Marketing’s web pages on the DAFF website or click here.
  • Find notes on the various laws affecting poultry production at www.poultrydiseases.co.za/downloads
  • International Trade Administration Commission of South Africa (ITAC) Tel: 012 394 3688 www.itac.org.za
  • National Agricultural Marketing Council (NAMC) Tel: 012 341 1115 www.namc.co.za
  • Find the list of state vets on www.sapoultry.co.za (take the “Downloads” option) or refer to the “Animal health” chapter in this book.

Associations involved

  • South African Poultry Association (SAPA) Tel: 011 795 9920 www.sapoultry.co.za Find the downloads for the Broiler Organisation, the Chick Producer Organisation and the Egg Organisation on the SAPA website.
  • The Developing Poultry Farmer’s Organisation can be contacted at the SAPA office.
  • The Poultry Disease Management Agency (PDMA) is tasked with the disease monitoring, surveillance, management, control and communication on behalf of the Poultry Producers. This agency is funded by the statutory levy paid by all the producers. See www.poultrydiseases.co.za or call 012 529 8298.
  • On www.saspo.org.za find contact details of clubs/associations affiliated to the South African Show Poultry Organisation.

Animal welfare

Poultry welfare is addressed by a new National Standard through the South African Bureau of Standards, set to replace the 2012 SAPA Code of Practice. In the meantime, the Animals Protection Act No 71 of 1962 applies.

Training and research

Find the “Training” option at www.sapoultry.co.za. Included in the material offered are training videos which can be accessed on YouTube. Also see the “Agricultural education and training” chapter.

  • The Agricultural Colleges working with Provincial Departments of Agriculture, offer poultry courses.
  • Many AgriSETA-accredited training providers offer poultry courses. Find the list at www.agriseta.co.za (under “Skills delivery” option). On the same website, read about learnerships and apprenticeships, a combination of on-the-job learning along with some theoretical training. The major part of the training can be offered on the farm.
  • Agriskills Transfer Tel: 012 460 9585 www.agriskills.net AgriSETA-accredited training.
  • ARC – Animal Production Institute Annetjie Loubser – 012 672 9153 / 111 www.arc.agric.za The poultry unit offers excellent training opportunities to students from tertiary institutions and those wanting to start poultry farming. It also offers facilities for research to all stakeholders in the poultry industry.
  • Council for Scientific and Industrial Research (CSIR) Tel: 012 841 2911 www.csir.co.za A research team led by its bioscientists successfully developed a novel pasteurisation system.
  • Dicla Training Centre Tel: 071 692 2229 www.diclatraining.com
  • Dumela Poultry Solutions Jan Grobbelaar Tel: 084 567 8975 jan [at] reveal.co.za
  • KwaZulu-Natal Poultry Institute (KZNPI) Tel: 064 860 0130 www.kznpi.co.za National Certificate: Poultry Production (NQF 3) – accredited with AgriSETA. Shorter poultry production courses are run in conjunction with SAPA and the KZN Department of Agriculture. Other training courses can be offered by arrangement.
  • Mpofu Small Stock Training Centre Tel: 040 864 9064 A training centre in the Eastern Cape which has been instrumental in providing poultry farming skills
  • NOSA Agricultural Services Tel: 033 345 8990/9238 www.nosaagri.co.za Training and training materials.
  • Poultry Information Centre Rod Simpson – 082 853 5701 www.poultryinfo.co.za An accredited facilitator and assessor with AgriSETA providing short courses on poultry
  • Project Literacy runs an introduction to poultry farming for small-scale farmers. See www.projectliteracy.org.za.
  • SAPA arranges training courses. These include broiler flock management, broiler breeder flock management, commercial layer management and hatchery management. Contact SAPA in connection with these. Call 011 795 9920 or find the “Training” option at www.sapoultry.co.za.
  • Skills for Africa Tel: 012 379 4920 / 082 770 4262 www.skillsafrica.co.za AgriSETA accredited training.
  • Stellenbosch University Department: Animal Science Tel: 021 808 4916 www.sun.ac.za/animal
  • University of the Free State (UFS) Department of Microbial, Biochemical and Food Biotechnology Tel: 051 401 2676 braggrr [at] ufs.ac.za, HugoA [at] ufs.ac.za
  • UFS Department of Animal, Wildlife and Grassland Sciences Tel: 051 401 2211
  • UFS Paradys Experimental Farm Tel: 051 443 9011
  • University of KwaZulu-Natal (PMB) Animal & Poultry Sciences Tel: 033 260 5808 www.ukzn.ac.za 
  • University of Pretoria (UP) Agricultural Economics, Extension and Rural Development Tel: 012 420 3251
  • UP Animal and Wildlife Sciences Tel: 012 420 4018
  • UP Production Animal Studies: Poultry Reference Centre Tel: 012 529 8224 Contract and academic research is done on poultry diseases. Small-scale farmer projects are run.

UP Faculty of Veterinary Science Department of Production Animal Studies Tel: 012 529 8013 www.veterinary.up.ac.za The Research Chair in Poultry Health and Production is housed here.

Companies involved

Equipment and inputs

Some suppliers of chicks and breeding stock

Producers and processors

Find the list of Halaal poultry dealers at www.sanha.co.za

  • AFGRI Poultry – see Daybreak and Midway Chix
  • Alzu Depots (Pty) Ltd Tel: 013 249 8900/1 www.alzu.co.za
  • Anca Chix Tel: 043 683 1774 www.ancafoods.co.za
  • Astral Operations Ltd [brands include Goldi Chicken, County Fair, Festive, Mountain Valley and Supa Star] visit www.astralpoultry.co.za.
  • Boschveld Tel: 087 940 3632 www.boschveld.co.za (indigenous chickens)
  • Chick Tech CC, a consultant A. Saunders
  • Chubby Chick Tel: 018 293 0202 / 0035
  • Cobb South Africa Tel: 031 242 8500
  • Cocorico Tel: 031 785 1337
  • Country Bird Holdings is the holding company for several brands including Supreme Chicken, Spring Chicken, Sublime Chicken, Ross Africa and Nutri Feeds. Visit www.cbh.co.za and www.rclfoods.com.
  • Country Fair – see Astral Operations Ltd.
  • Daybreak Farms Tel: 013 661 1063 www.daybreakfarms.co.za
  • Early Bird Farm Tel: 011 206 0600 www.earlybirdfarm.co.za
  • Eden Rock Poultry Farm Tel: 039 835 0062 / 031 765 3281
  • Eggbert Eggs Tel: 080 947 0121 www.eggberteggs.co.za
  • Eikenhof Poultry Farms (Pty) Ltd Tel: 021 975 0150
  • Elgin Free Range Chickens Tel: 021 859 2795 www.freerangechickens.co.za
  • Elite Breeding Farms – see Astral Operations
  • Elkana Poultry Farm Tel: 021 874 1223
  • Fair Acres Poultry Farm Tel: 011 540 6300 / 013 649 9000
  • Fourie’s Poultry Farm Tel: 018 293 0202
  • Free Range Chicken Co Tel: 021 975 0150 www.thefreerangechickenco.com
  • Grain Field Chickens Tel: 087 940 5100 www.grainfieldchickens.co.za
  • Heidel Eggs Tel: 013 751 3897/8 www.heideleggs.co.za
  • Highveld Cooperative Tel: 018 293 0694 www.toplay.co.za
  • Hyline Hatchery Tel: 011 318 2355
  • Kuipers Group – see Eagles Rock Feed Mill, WW Barlet Eggs, Wolma Poultry Farm, Eggbert Eggs, and Eagles Milling
  • Midway Chix Pty Ltd see AFGRI Mikon Farming Tel: 013 733 4133 http://mikonfarming.co.za
  • Midlands Eggs Tel: 033 320 1003 www.midandseggs.com
  • Mockford Farms Tel: 015 225 7097
  • Nulaid Tel: 021 864 8600 www.nulaid.co.za Part of Quantum Foods
  • Paardeberg Eiers Tel: 021 869 8414
  • Quantum Foods Tel: 021 864 8600 www.quantumfoods.co.za
  • Rainbow Farms (Pty) Ltd Tel: 031 242 8500 www.rclfoods.com
  • Rocklands Poultry – see Sovereign Foods
  • Rosendal Poultry Farm Tel: 021 862 3100
  • Rossgro Poultry Holdings Tel: 013 665 1999 www.rossgro.co.za
  • Safe Eggs www.safeeggs.co.za – see Nulaid
  • Sangiro Chickens Tel: 087 941 6474 / 012 205 1035
  • Sovereign Foods Tel: 041 995 1700 www.sovereignfoods.co.za
  • Supreme Poultry – see Country Bird Holdings
  • Top Lay Tel: 018 293 0694 www.toplay.co.za
  • Tydstroom Poultry Tel: 012 371 2961 www.tydstroom.co.za Part of Quantum Foods
  • Weldhagen Eggs Tel: 012 819 8000 www.weldhagen.co.za
  • Wolma Poultry Farm Tel: 013 245 4379 / 013 245 2070
  • WW Bartlet Poultry Farm (Pty) Ltd Tel: 011 952 9903

Abattoirs

Find the list of poultry abattoirs on the Directorate Veterinary Public Health web pages at www.daff.gov.za.

Websites and publications

Visit the websites listed earlier in this chapter.

Some articles

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