By Rick Kleyn, SPESFEED (Pty) Ltd, Rivonia, South Africa
Broiler production the world over is similar – or is it? We may all use similar genotypes but differences in climate, available resources, market conditions and human nature often mean that production systems can vary considerably from country to country. South Africa is no exception. In our country production varies from subsistence level farming, through simplistic commercial production systems to highly modernized and competitive integrated broiler operations. Interesting though the less sophisticated systems may be there is little that can be learned from them in commercial terms. This paper will focus on the nutritional strategies and opportunities employed by commercial nutritionists and producers in South Africa. It will begin with a brief sketch of the structure and some of the underlying forces which act upon the broiler industry in our country. These will then be developed to deal with the nutritional and feeding aspects of our industry.
The Structure of the South African Poultry Industry
Coetzee (2005) reported that the broiler industry is South Africa’s largest single agricultural enterprise, with an annual production of 810 000 tons of broiler meat last year and turnover in excess of R 8 bil (US $ 1.2 bil). The market has been characterized by steady growth, which my own research would indicate has been over 68% in the decade preceding the year 2003 (Kleyn, 2004). This growth has occurred at all levels of the industry. The South African government has realized that poultry production is an excellent way of empowering previously disadvantaged people and has become involved with numerous small scale poultry projects.
The South African poultry industry is dominated by two major producers who account for more than 60% of all meat sold. As with many countries, there has been considerable consolidation in the industry and some dozen or so companies probably supply 90% of all broiler meat. Eighteen percent of local poultry consumption is currently imported, 76% of which originates from Brazil (Coetzee, 2005). We principally make use Cobb and Ross genetic material, but
Hybro and Hubbard birds are also available. Much of the broiler meat produced in South Africa occurs at altitudes in excess of 1500 m above mean sea level. This has meant that ascites is a concern, particularly during the winter months.
Annual broiler meat consumption in South Africa is around 21 kg (46 lb) per person. Spent hens and traditional farmyard birds would add a few more kilograms to this. Red meat consumption is around 18 kg (40 lb) per person. South Africa differs from most other markets in that chicken is chicken. We prefer chicken hind quarters to breast meat and the price of thighs often exceeds that of breast meat. Our market is largely focused largely on producing “meal” sized carcasses with a dressed mass of 1.2 to 1.5 kg (2.6 – 3.3 lb). There has been rapid development of the Individually Quick Frozen (IQF) market of late as consumers have found this to be a convenient way of buying chicken. The fresh, further processed and alternative production systems are all markets that are growing relatively slowly.
Most of the major companies are “integrated” to some extent. However, these integrated organizations are structurally different from similar organizations in other parts of the world. The first major difference is that feed is supplied by “sister” companies who also supply feed to other customers, rather than a wholly owned subsidiary company or cost centre of the poultry company. This sometimes leads to divergent objectives amongst the management team and it is questionable if this is always the best way to maximize shareholder value. The other major difference between the South African industry and other companies is that some 80 to 90% of all broilers are produced on farms owned by the processors, rather than by contract growers.
As is the case in any commercial venture our objective is to maximize profit. Feddes, Emmanuel and Zuidhoff (2002) showed that as stocking density increases, so the production costs per kg of meat decline. Most South African companies are cognizant of this fact, and they measure profit in terms of the return per square meter of broiler house per year. This has meant that South African companies tend to use higher stocking densities than most countries and high yields per square meter are not uncommon. Obviously, cycle length impacts on profitability. As a consequence of this, there is intense pressure on turnaround time. One way in which this can be achieved is to use new litter from each crop and to this end South African producers do a complete cleanout after each crop. Typically wood shaving or sunflower hulls are used for litter. A summary of the South African poultry industry has been included in Appendix A.
In order to be world class producers feed ingredient prices need to be competitive when compared to the world’s two most efficient producers, namely Brazil and the United States of America. Both of these countries are net exporters of maize and soy beans. This means that the price that is paid for feed ingredients goes up and down with world markets, but by and large they are relatively cheap and stable. South Africa finds itself in a similar position with regards soy beans as we are net importers of protein (soy beans) and also suffer from the vagaries of the international market. More importantly, the country is characterized by erratic rainfall and poor soils. As a consequence of this maize production is erratic. This means that at times our price is determined by export parity and at others it is determined by import parity. Perceptions about the rainfall, the stock carry-over and currency exchange rates cause our prices to oscillate wildly between import and export parity (figure 1.). This makes managing grain purchasing in South Africa both difficult and risky. The irony is that South Africa is only a net importer of grain only once in every 7 to 10 years. The good news is that when maize is priced at export parity, South African poultry farmers enjoy really competitive inputs. Last year (2004) the average price paid for maize was around R 1050.00/ton (US$ 175.00). This year (2005) we will be paying between R 500.00 and R 650.00/ton (US$ 83.00 – US$ 108.00). As recently as 2003, the ruling price for maize was R 1450.00/ton (US$ 240.00). The maize price tends to impact on the price of other ingredients as well.
Figure 1. Long term maize price on the South African Futures Exchange (SAFEX) and the import and export parity prices. (Source, Grain SA, 2005)
Feeding and Nutrition
It is as a consequence of what are generally perceived to be uncompetitive feed prices that cause South African nutritionists and producers to be very focused on maximizing returns (profit) in the poultry industry. There are a number of areas that any nutritionist can focus on in order to maximize returns, and the remainder of this paper will deal with each of these areas in turn.
Early Chick Nutrition
Worldwide the poultry industry has come to realize the importance of feeding and managing the young chicken. Indeed, the performance results achieved during the first week of life have been shown to have a correlation on the final performance of the flock (Kenny, 2005). When a chick hatches it has an undeveloped gastro intestinal tract (GIT) in terms of it anatomy, physiology and enzymatic capacity (Sklan, 2001). In addition, the newly hatched chick has what is essentially a sterile gut and it needs to develop a healthy GIT microflora for both digestive and health reasons (Lan, et al., 2005). Batal and Parsons (2002) clearly demonstrated that feed utilization, both in terms of energy and amino acids is severely compromised in young birds. By 10 days of age the utilization of protein has achieved normal or mature levels, but it takes until 15 days of age for energy utilization to normalize.
There are a number of farm management interventions that can be used to ensure a good start, but ultimately the birds should have early access to feed and water and their intake during the first week of life is critical. Early access to feed and water is important so that the transition from using the nutrient (largely lipid) contained in the yolk sac to a cereal based (largely carbohydrate) diet that serves as the trigger for both the physiological and enzymatic development of the GIT (Sklan, 2001). For this reason it is essential to get the newly hatched chick onto the farm as soon after hatching as possible. Ribeiro & Penz (2005) were able to demonstrate how increasing feed and water intake resulted in higher 7 day weights. This clearly illustrates the importance of on farm management.
From the nutritionist’s perspective there are a number things that can be done to ensure that the newly hatched chick achieves its potential; nutrient content of the diet can be altered, digestibility of the diet can be improved; or additives can be used that will stimulate GIT development, aid digestion or enhance the development of the microflora ecology. The scope of this paper precludes a discussion as to the importance of the various additives, but it is this area that possibly represents one of the greatest opportunities for all nutritionists.
There are many ways in which the digestibility of the diet can be improved. This can be achieved through the use of highly digestible ingredients such as brewers yeast, prime gluten, milk components or the simple sugars such as glucose or dextrose. It would make sense to use high protein, low ash fishmeal, and vegetable protein sources low in fiber for example. Recent work by Applegate (2005) demonstrates that increasing the digestibility of maize by de-hulling and de-germing it lead to a significant improvement in broiler growth.
Dietary Nutrient Content
The feed specifications used in any broiler diet are derived through an initial determination of the birds’ nutrient requirements. Expected nutrient requirements, recommended allowances and ultimately feed specifications are available from many sources. These include the sets of tables published by in the American NRC (1994). Increasingly, commercial companies such as Adessio (2003) and Ross Breeders (2004) are also publishing values. Often these publications do not allow for the derivation of circumstance-unique recommendations. Simply put, the question that needs to be asked is not “what recommendation as to the daily allowance of nutrients should be made in order to maximise profit?” but rather, “what is the target response needed for maximum returns?” and “how is that response satisfied in terms of nutrients?” Put another way, what recommendation as to the daily allowance of nutrients should be made to achieve this target (Whittemore, 1983)?
The young of modern broiler genotypes, in particular, are able to respond to ideal protein in the diet in a linear manner, Wijtten et al., (2004a); Plumstead et al., (2005). Commercial nutritionists need to make a decision as to what level of digestible lysine a diet should contain in order to maximize returns. This decision is further complicated by the finding of, Wijtten et al., (2004b) who were clearly able to demonstrate that the level of protein included in the diet of the young chick, impacts on its lifetime performance.
The determination of the energy level of poultry diets is perhaps the most important decision that has to be made by the nutritionist. Energy contributes approximately 60 to 70% of the cost of a broiler diet, making the selection of an energy level that will maximise profit all-important. It is widely accepted that nutrient requirements should be expressed in terms of grams of nutrient per unit of energy contained in the diet. By deriving functions of broiler response to energy density, it is possible to determine the optimum energy level of a diet. Saleh et al. (2004) and Guevara (2004) have both studied the effects of nutrient density on the modern broiler. In figure 2, a simple set of polynomial models was fitted to the data of Saleh et al. (2004).
By making use of a standard feed formulation program, Format International (2005), for example, the ideal amino acid profile as published by Lemme et al., (2004), standard ingredient costs and an estimated value for a live broiler, it is possible to calculate the return at the different energy densities (figure 4).
Whilst this data is useful, it was determined using very low stocking densities (10 birds/m2). The work of Berri et al, (2004) demonstrates clearly that at higher stocking densities birds respond to nutrients, total lysine in this case, in a different manner. The consequences of this are that often experimental data may not apply to commercial conditions. Where stocking densities are higher the expected growth on lower density diets may well be over-estimated.
It is of interest that Saleh et al. (2004) reported that there was no increase in mortality or leg disorders when feeding high-density diets. Abdominal fat was not adversely affected by increasing nutrient density when protein was maintained in ratio to energy. Breast meat yield and percentage remained constant as the nutrient density changed.
The choice of diet at any particular stage in the production process can have an important impact on the overall profitability of a broiler operation, both in terms of input costs and technical efficiency. As birds grow, so their energy requirement increases relative to their protein (specifically lysine) requirement. Feeding different diets leads to over or underfeeding of these two critical and expensive components of the diet. This is illustrated in figure 4.
Figure 3: The change in lysine (protein) and energy requirement as broilers age
Emmert & Warren (2000) compared the NRC (1994) recommendation to three diets formulated on an Ideal Protein basis to meet the weekly requirements for a flock of broilers. The specifications used in these diets are summarised in table 1 and the results are shown in table 2. Both of these tables are below.
As can be seen, phase feeding had an impact on not only FCR (which was not significant), but also on lysine utilisation. Although not shown, any reduction in lysine usage would ultimately lead to a reduction in cost. Further experiments conducted on birds of different ages showed improved performance in addition to improved amino acid utilisation (Pope et al., 2004).
Table 1: Summary of specification of diets used in experiment (Emmert & Warren, 2000)
Table 2: Results of Experiment 0 to 21 days (Emmert & Warren, 2000)
Table 3 shows what the impact of changing not only the number of phases, but also the manner in which the different phases are offered to the birds. It can be seen that the total nutrient allocation to each bird remained effectively the same. It is important to point out that in this worked example it was assumed that the growth and feed conversion ratio remain the same. The work of Emmert et al. (2000) illustrates that it is likely that FCR will improve and practical experience has shown us that body weights generally improve when more phases are fed.
These data illustrate how both the feed costs can be reduced by simply managing a more effective phase feeding system. In practice there are very few South African companies who do not feed four or more phases of feed. A high nutrient density, highly digestible Pre-Starter diet is mostly used in order to get the best possible weight at 7 days of age. The simple expedient of using a drug and mineral free withdrawal diet will save an additional 6 cents (1 US$ cent) per bird. A summary of typical diets used in South Africa are shown in Appendix B.
The choice of alternative feed ingredients represents what is possibly the greatest opportunity for the nutritionist. Traditionally, the value of an ingredient is determined by four things; the price and nutrient content of the ingredient itself; the price and availability of the other ingredients; the diet in which it is to be used and lastly, it must conform to the physical and quality standards that the nutritionist sets. Opportunity may well be lost if the nutritionist ignores bird response to nutrient density, and it is this aspect that needs to be added to our methodology of evaluating an ingredient.
South Africa is a country that is characterized by the production of sunflower seed. It is a crop which is fairly drought resistant and has a short growing season, both of which suit our somewhat unpredictable climate. The net result of this is that sunflower meal is mostly available in fair quantities at reasonable prices. The quality of sunflower meal can vary, depending on how much of the husk is removed (decortication) during the oil extraction process. In South Africa, sunflower meal is mostly sold with a guaranteed protein content of 38%. The protein is of good quality in that amino acid digestibility is high.
The other ingredient that South African nutritionists are using in increasing quantities is Full Fat Soybean Meal (FFS). Many feed millers now have their own manufacturing facilities. FFS is seen as having a number of important advantages; the beans are easy to store and handle, and FFS can be manufactured on demand using cheap equipment; it provides the nutritionist with a pure fat source which is easy to handle and contains low levels of oxidized fats; it provides a means of increasing the nutrient density of the diet which in many cases leads to an improved return of the feeding operation.
Traditionally, South Africa has been a major producer and net exporter of fish meal. In the past fish meal was both cheap and readily available. A reduced catch, as a result of over fishing, and increased world prices has made it a less popular ingredient. Some nutritionists still like to maintain minimum levels of fish meal in broiler diets. In addition, it is a useful ingredient when high density diets are to be considered.
Other animal byproducts may and are used in poultry diets in South Africa. Poultry By-Product Meal is used by many integrators, but pressures from large super market chains and concerns about bio-security have seen a reduction in its use. Products of ruminant origin may be used in poultry diets, but not in ruminant feeds. As few of the feed mills in South Africa are dedicated to the manufacture of poultry diets, these products are not widely used at present.
The decision as to the value and use of either sunflower meal, FFS or fish meal for that matter in a typical broiler diet needs to take into account the parameters set out above. In addition, considerations as to the limits (bounds) set on the inclusion of either ingredient needs to be taken. In the case of sunflower meal considerations as to the maximum amount of fiber that should be included in any diet need to be taken. Although FFS is an effective way of adding oil to the diet, many feed millers restrict it’s use to some extent as they believe that it has a negative impact on pellet quality. Perhaps the most important component of the evaluation process is a consideration of the ingredient/nutrient density interaction. Using the data published by Saleh et al. (2004) and the same iterative methodology as described above, the use of both cheap sunflower meal and FFS was evaluated. The results of this evaluation (Figure 4) illustrate that should sunflower be available, it may well pay the nutritionist to reduce nutrient densities. On the other hand, should FFS become freely available, it will pay to use more dense diets. The nutritionist should be aware that birds held at high stocking densities may respond differently to nutrients, Berri et al, (2004).
Figure 4: The return per broiler at incremental nutrient densities, for standard diets (- -), diets including cheap sunflower meal, (_ _ _) and diets including cheap FFS (___), using the data of Saleh et al., 2004.
South African broiler producers find themselves in a competitive environment. This is for two reasons. Firstly, our feed ingredient prices are high. Secondly,
We are a part of the global market and to compete against the more efficient broiler producers in the world. We therefore need to remain as efficient as possible. In order to measure the efficiencies of any production system, it is essential that the return per unit of production per unit time be measured and maximized.
The biggest challenge facing South African poultry producers has to do with ingredients. As a country we are not self sufficient in terms of protein. Secondly, our grain price is extremely unstable. When the effects of an erratic currency are added to both of the above factors, long term management becomes difficult.
In broad terms, the strategies that are employed to maximize returns are the use of high broiler stocking densities, the use of diets of the optimal nutrient density and the employment of phase feeding regimes.
Highly unstable ingredient prices also offer the South African poultry industry opportunities. Companies and individuals can gain competitive advantages by using correct purchasing strategies. In addition, by making intelligent use of alternative feed ingredients and an accurate determination of their net value to the broiler production system, opportunities can be gained. Future opportunities exist, not just for South Africa, in a better understanding of gut health and function and in the use of non-nutrient feed additives.
I would like to thank Cobb-Vantress Inc., for making it possible for me to attend this meeting. Thanks also to Dr Mark Jackson for help with some of the translations.
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Appendix A: Fact sheet on the South African broiler Industry
1. The Industry
- Total production 12 mil broilers/week.
- 810 000 of broiler meat produced a year.
- Growing at 6 to 8% annually
- Per capita annual consumption of broiler meat is 21 kg (46 lb).
- Value R 8 bil. (US$ 1.2 bil).
- Most production from large integrators, most of whom own theirown farms.
- Much of the current expansion in production is being achievedthrough contract growing.
- 18% of local consumption is imported, largely from Brazil (76%).
- Very little poultry product is exported.
- Use largely Ross and Cobb genotypes. Hubbard and Hybro areavailable.
- Most birds produced at an altitude higher than 1500m (5000 ft) above mean sea level.
- Hot summers, mild winters but with large temperature variations. 20°C (70°F) difference between minimum and maximum are not unusual.
- Producers use high stocking densities 18 birds /m2 (0.6 sq ft/bird) in open sided houses. 22 birds/m2 (0.49 sq ft/bird) in ventilated houses.
- Short cleanout periods (often less than 14 days). Litter completely renewed, using either wood shavings or sunflower hulls.
- Use complete range of AGP’s and ionophores.
- Slaughter weights 1.7 – 1.95 kg (3.7-4.3 lb)
- Mostly unsexed birds are used.
- Slaughter age 35 to 40 days.
- Feed Conversion (lb/lb) 1.7 – 1.85
- European Performance Efficiency Factor < 220 poor Phase feed high density diets (see Appendix B). 240-260 average > 280 good.
3. The Market
- It is estimated that South African’s become 3% more affluent with each passing year.
- The market is still largely driven by cheap chicken.
- There is a small market for alternative products (free range,organic, drug free, further processed).
- Some birds being sold live, but this is a decreasing market.
- The market is largely for frozen product, but demand for freshproduct is growing.
- Ideal carcass weight 1.2 to 1.5 kg (2.6.to 3.3 lb)
- No big price differentiation between different cuts.
- The Individually Quick Frozen (IQF) market growing rapidly.