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Why more poultry farmers will lose investments

For every commercial poultry farmer, 2020 is the worst year in decades. They have been going through one problem after another:

For every commercial poultry farmer, 2020 is the worst year in decades. They have been going through one problem after another: the lockdown that locked their markets, scarcity of maize, and now soybeans, which has pushed prices of feed to a record high.

Even the money generated from egg sales can no longer feed the birds, let alone additional costs for layer farmers. And for those in broiler productions, it is hard to pay farm workers, feed the birds and undertake other overhead costs.

Maize and soybeans make up the largest components of the basic ingredients in the poultry feed. The subsector is, therefore, highly sensitive to the prices of these grains.

With the grains supply situation in the country, the prices of maize went up from N95,000 per tonne to N165,000 in June, 2020. The farmers said maize, as at November 26, was selling between N145,000 and N165,000 per tonne, as against the price of N85,000 this time in 2019.

The price of soybeans, which was much cheaper months ago, is now up by almost 100 per cent, selling between N215,000-N250,000 per tonne as at today, where available.

These grain prices translate into 75 per cent  cost of poultry production, raising prices of finished feed from N2,650 to more than N5,300 per 25kg bag.

Mr Austin Dalyop, the general manager, Premier Feed Mills Co Limited, a subsidiary of the FMN, Lagos, gave reasons why there is scarcity of soybeans and many farms will go down. He said Nigerian soybeans had the highest quantity of oil, and therefore, attracts premium for export.

The smart ones in the industry decided to export some of the soya in seed and meal to Europe, to other parts of Africa, and even to the Far East.

On the reasons most farms will further shut down, he said, “Issue is that the commodity is scarce and is also very expensive. The smallholder farmers who are the bedrock of the industry are falling apart because they cannot sustain these high prices. I am sure that in recent times we are buying eggs in crates, between N850 and maximum N1,000.

Today, if you go to the market it is at N1200 and people are not buying. So if the people cannot buy the eggs or frozen chicken because of high cost, how can the farmer grow? We foresee that people are just managing because of the festive season ahead of us. Immediately after Christmas, most farmers will stop rearing chicken and sell off.

Another instance is that usually, if you keep layers they will lay for 100 or 110 weeks. Today, what the farmers are doing is selling the layers at 50 to 60 weeks because they cannot sustain the prices of feeds. The eggs they collect cannot feed the birds and they would be at lost, so the best thing for them is to sell off. So the picture going forward is not good at all.”

Alhaji Umar Kibiya Usman, the chairman of Pan, Kano State chapter, and the director-general, Dr Anallo Akpan, said the situation called for urgent government attention because closure of small and medium-sized poultry farms would lead to the loss of 5million to 10million jobs in semi urban and rural areas.

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