Roy Chapin Writing on the Benefits of Improving Livestock Rations in Ukraine with Suggestions On How To Do It

Increasing Animal Performance in Ukraine Via Improved Nutrition & Feed Formulation with Associated Benefits to Suppliers, Processors and Consumers.

Many people and organizations supported by a number of foreign countries are working to help Ukraine improve its global competitiveness in the production of agricultural products. Much of the infrastructure enjoyed by developed countries is not operable in Ukraine. Often it seems that every time you start to improve one sector, there is another limiting factor in another sector that needs to be addressed.

The missing factor that I want to discuss in this communication concerns the livestock feed industry and the lack of nutritionally adequate rations available to support optimum livestock production, including meat and milk, in Ukraine. I will also make some suggestions on what can be done to solve this problem.

Ukraine is, as is all of Europe and most of the world, deficient in protein. Unlike most of the rest of the world, Ukraine, with 40% of the world's best soils and a favorable climate, can do something about it. There is at present a concerted effort by various organizations, including Kyiv-Atlantic, to increase the production of soybeans in Southern Ukraine and oil seed rape in other parts of Ukraine. When the oil is extracted from these oil seeds, there is a high protein meal produced that is of good quality. Increasing the demand for these oil meals would increase the profitability of raising and processing soybeans and canola and thus create more wealth in Ukraine. The bankers to whom I've spoken see the economic implications of increased production of soybeans and canola in Ukraine and are more favorable to finance these operations (growing and processing) than other segments of agriculture.

Livestock production in Ukraine continues to decline, partly because it is not competitive (low production efficiency) with abundant food imports from other countries. There is also decreased purchasing power (lower gross domestic product) among the Ukrainian population. Livestock performance figures for average daily gain, units of feed per unit of gain, milk production per lactation and carcass characteristics (too little lean and too much fat) are less than impressive and far below Western world standards because of a failure in Ukraine to feed nutritious rations that will support optimum livestock performance.

The gross domestic product of a country is dependent upon its labor productivity. Are people willing to work and do they get something done when they invest their labor? Improving the performance of animal agriculture improves the efficiency of utilization of limited inputs, improves the gross domestic product and increases the standard of living. How can anyone expect animal agriculture in Ukraine to become globally competitive until rations are fed that meet nutritional needs?

Knowledge is readily available on how to formulate high performance rations but Ukrainian livestock producers too frequently opt for the cheapest feed rather than the one that will make them the most profit. The availability of protein, vitamins and minerals in much of Ukraine is also a challenge due to a breakdown in the supply function. There is an ample amount of the energy (grain) components at competitive prices available in Ukraine. At present, world grain prices are depressed and Ukraine is having a problem utilizing all of the grain they have produced. Scientifically combining the protein meals and inexpensive grains grown within the borders of Ukraine with the proper vitamins and minerals would make 'profit generating" high performance rations available to the Ukrainian livestock producer. Demonstrating the benefits of feeding improved rations to livestock feeders is important in order to create the demand for quality feeds by those who feed animals.

Because of the (1) local availability of feedstuffs in Ukraine (grains are readily available and high protein oil meals from canola and soybean are becoming more available from Ukrainian sources and could be plentiful if the Ukrainian oil seed industry is stimulated by increased demand) and (2) the need for improved livestock rations, there is a big need and considerable opportunity TO BUILD AN INTERFACE between the producers of grains and high protein oil meals (soybean and canola) and the feed needs of livestock producers. This is done best through informed feed manufacturers and discriminating animal husbandry personnel.

If this were done successfully, the producers of the protein and energy feedstuffs would have an increased market and the greater income associated with greater demand. At the same time, livestock producers would increase their incomes because of improved animal performance. This would lead to a greater supply of agricultural commodities for the processors of meat and milk, making for more efficient conversion to food. The Ukrainian consumer would be the ultimate benefactor. By using locally grown components to improve the quality of feed fed to Ukrainian livestock, greater wealth would be created in Ukraine in the crop and livestock sector as well in the processing industries.

I therefore propose that more attention be paid to the feed industry of Ukraine.

Since the benefits of improved livestock feed are far reaching, this is a logical place for USAID to get involved so as to help impact several agricultural sectors rather than expecting the participants in only one segment (such as the oil seed sector or grain sector or feed supplement sector or the livestock sector) to initiate and promulgate these changes. Perhaps a combination of USAID and private industry financing would be appropriate with substantial investment made by the potential benefactors.

Professionals should (1) work with the feed manufacturers and their suppliers to improve the formulation and production of feed for specific livestock functions, (2) encourage the feeding of quality rations by livestock producers, (3) improve animal husbandry practices and (4) encourage agribusiness management decision-making that focuses on profit. By applying the agribusiness management concepts that USAID funded professionals are already teaching throughout Ukraine these profit maximizing objectives can be accomplished.

USAID is already funding the contact organizations needed to reach the Ukrainian feed ingredient supplier, the feed producer and the livestock industry via their various Farmer to Farmer programs, USDA's Commercial Agriculture Development Program, regionally in Western Ukraine by the Western Ukraine Initiative, etc. What is needed is someone to focus specifically on improved feed formulation and delivery to informed and receptive livestock producers. This could be Kyiv based or started from a regional location. This should be a full-time USAID funded position so as to realize the maximum impact from coordinating the many people and projects already operational in Ukraine that would be involved. Part-time people and volunteers won't be able to develop the necessary coordination among all the players as effectively as if there is a full time commitment by one or more people.

The person or persons employed should be animal scientists trained in animal nutrition and livestock management with considerable applied experience. They should also have economic and agribusiness management training with commercial field experience. A good understanding of former Soviet Union reality accompanied with a sincere desire to see improvement in Ukraine would be important.

A USAID and private investor partnership program to improve the livestock feeding industry in Ukraine could be broken into several component parts so that a "systems approach" was emphasized, including (1) feed control officials, (2) feed ingredient suppliers, (3) feed manufacturers, (4) livestock feeders, (5) processors of animal products into meat and dairy products and the (6) consuming public.

At present, Ukraine has a feed control bureaucracy that, besides doing the normal compliance function, also dictates the levels of nutrients allowed in feeds and feed supplements. Their argument is that the local livestock producer must be protected from "greedy foreign capitalists" that will over-formulate supplements so as to increase their costs and selling prices. Supplement suppliers don't have to add more nutrients in order to increase their price. In fact, selling for a higher price is usually a negative. Supplement suppliers are tempted to add lower levels of nutrients and sell for less money rather than to add higher levels of nutrients that would improve animal performance but would also necessitate a higher price, making them harder to sell. I'm also concerned about the opportunity for bribes to get formulas accepted by the control officials. Feed control officials should concentrate on feed tag compliance and set the acceptable levels only of those ingredients that could be dangerous to the public health, such as drugs and specific nutrients such as selenium, vitamin A etc.

USAID could supply feed control experts to assist this sector. At present, the state feed control officials can stop the formulation to adequate nutrient levels because their central planning officials have determined what they think is adequate.

With the present deplorable animal production status in Ukraine, against what is the livestock feed purchaser being protected?

In reality, the state is protecting the consumer against making their own decisions, feeding adequately fortified rations, making a profit and supplying quality and economical food to Ukrainian consumers. I hate to think what the level of livestock production in the USA would be if the U.S. government had dictated nutrient levels that were considered acceptable when I was in graduate school studying animal nutrition. Few successful nutritionists in the USA formulate to the National Research Council's suggested nutrient level minimums. As animal performance improves it is common to have to increase nutrient levels to support the higher performance.

The Ukrainian feed manufacturers need (1) improved nutrition knowledge and (2) supply sources for the needed nutrients. A Western feed manufacturing professional could help with both challenges. Ukrainian feed manufactures also need to be concerned with how well their customers' livestock perform on the feed supplied. What I have seen here is that there are few if any vitamins and minerals except salt and limestone (which are cheap) and little protein added to feed rations. There is more concern with filling the sack with something that adds weight rather than in supplying a feed that will profitably produce milk or meat or eggs.

Besides knowing how to formulate quality feeds, the feed manufacturers will need some "encouragement" from Ukrainian feed control officials to put in the feed what is guaranteed on the tag. Supplements are expensive and in the short run the feed manufacturers can increase their profit by compromising on adding adequate levels of vitamins, minerals, protein and high energy sources. This "cheating" is a short-term benefit as quality usually sells, particularly in the livestock feed industry.

There could be a big benefit to the Ukrainian animal industry if the feed manufacturers of Ukraine formed and participated in an oblast and/or national feed manufacturers association. USAID has encouraged the formation of private farmer cooperatives so it would be consistent with the West's objectives to encourage the formation of a feed manufacturers association. Teaching nutrition and good feed mill manufacturing principles along with being a network for finding supplies would be obvious benefits. Suppliers could focus on reaching the individual feed manufacturers via trade shows rather than having to travel to each local feed manufacturer. As the past president (two years) of the Oregon Feed, Seed and Suppliers Association, I know the benefits of these organizations. We rewrote the Oregon Feed Control Law and got it through the Oregon legislature. It is still in effect. A Ukrainian feed manufacturers association could function similarly.

Producing quality feeds takes care of the supply function but there must be demand for high quality feeds if they are to be fed. A Western animal nutrition professional could help sell the livestock industry on the benefits of feeding quality feed. This could be done via local meetings with livestock producers and by conducting feed performance trials complete with transparent cost data that would demonstrate that "good feeds cost less". A trial that showed that a pig could reach market in five months rather than twelve months while eating three kg of feed per kg of gain rather than two or three times that much with a much improved carcass (bigger loin eye area, meatier hams and less fat) should make a positive impression on producers. Increasing milk production from 3000 liters per lactation to 10,000 liters would also create some interest (although the forage and the genetic potential of the cow would need to be increased as well as the concentrate feed quality). Income and costs should be carefully recorded. The concept of feeding for a profit rather than for the lowest feed cost should be emphasized. The entire agribusiness management curriculum already being taught by USAID contractors could be put to good use to increase the demand for quality feed. Getting enough money for the feed mill to buy the necessary ingredients or for the feeder to purchase it is a challenge that needs to be addressed. Feeding fewer animals a better ration would increase profits. Getting a hog to market in six months rather than a year would increase the profit, turn the money in half the time and double the number of pigs marketed. The profit could internally finance expansion. Feeding animals poorly and realizing a loss isn't smart.

Involving the processors of milk, meat and eggs would also be beneficial. Helping processors to establish quality standards for their suppliers of animal products with prices set accordingly would encourage livestock producers to produce high quality commodities. This quality emphasis would extend in both directions and would include the feed manufacturer and his suppliers and the consuming public who we are ultimately trying to satisfy.

A market for improved animal agricultural products could also be developed. For instance, there must be a market among Westerners in Ukraine that prefer some lean meat when they buy bacon and would purchase more pork chops if they had a larger loin eye area with less fat covering.

This overall approach to helping Ukraine develop its animal agriculture is not without parallel. It would be similar to Land O'Lakes' Western Ukraine Initiative (Implemented by Kenneth Smith of ACDI/VOCA) and its attempt to improve the banking industry and credit situation in Ukraine by working with both bankers and the users of banks. This suggested approach to improving the Ukrainian feed industry would substitute feed mills and buyers of livestock feeds for the bankers and the users of bank services.

Many of the Western funded projects to help Ukraine have taught general concepts with the Ukrainian recipients of the training expected to apply what they've learned to specific projects of their choice. The proposed animal feed approach would be a specific application that would reach out for information from a number of other disciplines to achieve the desired results. More excitement can be generated when a specific rather than a general objective is targeted. Working with private family farmers either as individuals or as members of agricultural cooperatives (which USAID funded contractors are helping to create) will be easier and more productive if there is a definite vision as to what is trying to be accomplished.

It is possible to help Ukraine become globally competitive in their livestock industries but not until their animals receive high quality rations that will support world-class animal performance. By making the Ukrainian livestock industry globally competitive the producers of high protein oil meals (canola and soybean) and grain also will be benefited via increased demand for their products. Providing animal nutrition technology support to feed mills and livestock producers would improve a vital component of the infrastructure of the Ukrainian food production chain and remove a bottleneck that is keeping Ukraine from creating wealth and becoming globally competitive in animal agriculture production.

Funding a program to improve the quality of livestock feed produced in Ukraine would be consistent with USAID's efforts to promote private family farmers and private agribusiness development, helping to make them both self-sufficient.

Roy Chapin, Ph.D., Animal Nutritionist

11145 Chapin Lane, Amity, Oregon 97101
Phone: 503-835-7317
Fax: 503-835-3333
E-mail: <[email protected]>