High cost of feeds drives farmers out of dairy and poultry business
By Graham Kajilwa | September 8th 2021
When Ann Ngugi ventured into poultry farming 25 years ago, the 67-year-old reveres how the business was lucrative. A tray of 30 eggs would fetch a reasonable profit. It is, however, not the case today.
Over the years, the price of animal feeds has gradually been increasing and she barely makes a profit. “I am just doing poultry farming because it works like any other work,” she says.
She says a 70 kg bag of chick mash now goes for Sh3,330 while for layers, the price is Sh2,650. This high cost combined with cheap imports has made business for farmers like her untenable.
“These feeds are expensive. Sometimes, we would feed the chicken well and you get quality eggs but when you get to the market, you find eggs from Uganda,” says Ngugi. “We sell our eggs at Sh300 a tray yet those from Uganda go for Sh220 for the same tray.”
Because of the imports, she notes that the price is now Sh285. “If the feeds were retailing at Sh2,250 or Sh2,400, I know if I sell a tray at Sh350, I will make good profit,” she says.
“I get 40 trays a day yet the market is flooded with imports from Uganda. That is why you get a farmer who tries this business for one or two years and quits.”
These high prices of feeds, not only affect poultry farmers like Ngugi but also pig and dairy farmers as well. Due to the government’s inaction on the matter as revealed by their umbrella body Association of Kenya Animal Feeds Manufacturers (Akfema), a meeting was held on August 30, 2021, to seek the way forward.
One major challenge, as noted by Akfema secretary general Martin Kinoti is that Kenya does not produce any reasonable quantities of the raw materials used to manufacture the feeds.
They include soybeans and sunflower or cotton whose by-products soya bean meal, sunflower seed cake or meal and cottonseed cake or meal are the major sources of protein in animal feeds.
It was noted that Kenya depends on imports from Zambia, Tanzania, Uganda and Malawi. Such explains why a tray of eggs from Uganda would sell in Kenya for as low as Sh220.
For a Kenyan poultry farmer to make a profit, they have to sell theirs for Sh350. “A bag of layers mash has gone up from Sh3,000 to Sh3,400. In the same period, pig feeds and all other feeds have experienced similar increases,” said Kinoti.
A bag of dairy meal has also gone up from Sh2,000 to Sh2,350 as a result of a rise in the price of a kilo of soya beans from Sh70 to Sh130.
Kinoti says the increase in raw materials in the past three months is between 25 per cent to 65 per cent while feeds have gone up between 15 per cent and 20 per cent.
“This has therefore resulted in feed-millers operating at a loss and many of them have already closed down operations,” he said.
Mambo Gathungu, Proprietor Lakeside Dairy says he buys a 70 kg bag of dairy meal for Sh2,250 yet at one point it was Sh1,300.
This increase, he says, has to be shifted to the consumer but the monopoly in the market from giant competitors who have the advantage of economies of scale would make it difficult.
“Due to the economy of scale, some small-scale farmers are opting out. When you find that feeds that were enough for 10 animals can only feed three, a farmer will see they are not making a profit and this is bad for food security,” he says.
But while Kenyan farmers are lamenting the high cost of feeds, the association notes that some of the by-products that can be used to manufacture feeds in the country are being exported to other nations that offer better prices.
These are wheat pollard, wheat bran and maize germ that end up in Arab nations. “The result has been a severe shortage and sharp increase in prices of raw materials. For example, wheat bran prices have moved from Sh17 four months ago to Sh24 today,” says Kinoti.
He says local tax regimes and slow clearance of raw materials when imported do not make the worse situation any easier.
Want to become a millionaire? Follow Warren Buffett’s 4 rules
- Financial discipline: Educate children when they are young
- Bonds boost NSE as investors shy away from equities
- Nuked out: Kenya’s nuclear power agency to be disbanded in cost cutting plan
- KICC once again named Africa's best meetings, conference venue
- The sins of power producer