How can Ukraine expect to have a world class animal industry unless they also have a world class livestock feed industry?
The Importance for Ukraine to Develop a World Class Livestock Feed Industry!
The livestock industry of Ukraine and the associated industries (meat and milk processing, for example) have been decreasing in number and importance for the last several years. At the same time the demand by Ukrainians for imported animal products - meat and dairy products - has been increasing. Why this switch from consuming domestically produced to foreign produced food?
Quite simply, it isn't profitable for Ukrainian farmers to produce meat and milk. We must remember that in a market economy, production decisions are driven by a profit incentive and not to meet a quota demanded by central planning. A market economy allocates limited resources to the highest bidder and therefore maximizes the customer satisfaction possible from limited resources. The present dismal economic situation killing the Ukrainian livestock industry tells us that something needs to be fixed! Only a dreamer keeps doing things the same way while expecting the outcome to improve. Ukraine must diagnose the problem and make the appropriate changes.
Why is the livestock sector of Ukraine unprofitable? I'm suggesting that a major reason is that high quality livestock feeds either are not available or are not being fed. By "high quality" I'm talking about feeds that supply adequate protein, energy, vitamins and minerals to support the desired metabolic functions of maintenance, growth, lactation, reproduction, egg laying, etc. at globally competitive levels.
How can Ukraine expect to become globally competitive in animal agriculture without feeding world class rations formulated for the specific animal production objective? You can't be world class in animal agriculture by feeding third world rations.
How can Ukrainian pork producers that get a pig to market in one year compete economically with Western producers who finish a pig in less than six months and on substantially less feed? From an economic standpoint, getting your investment back in six months rather than a year is significant, particularly when faster-growing pigs eat less feed and make more profit than pigs that take a year to reach market weight.
Consider also that double the number of pigs can be finished per year in the same facility when it takes six months rather than a year to reach market. The faster growing pigs receive adequate protein, energy, vitamins and minerals and produce a more desirable carcass with much less fat and more muscle (larger loin eye area in the pork chops, more meat in the bacon and larger meatier hams).
Dairy cows in Ukraine produce 3000 liters of milk per lactation when cows in the West routinely produce 10,000 liters or more per lactation. The same unfavorable comparative observations can be made for poultry - broilers and eggs - production.
It doesn't have to be this way! Ukraine has forty percent of the world's best soils with a climate that is conducive for the production of grain. Ukraine has gone from being the bread basket of Europe to being an international basket case. Let's change that!
All of Europe, including Ukraine, is deficient in the production of protein. Ukraine has the potential to become protein sufficient by developing soybean production in the South and oil seed rape (canola) production in much of the rest of Ukraine. By combining high protein oil meals left after the oil is pressed from the soybean and canola oil seeds with grain that can produced with abundance in Ukraine, along with the proper supplementation of vitamins and minerals, Ukraine has the potential to produce world class livestock rations that will support globally competitive livestock production. The result would be increased demand for Ukrainian produced feedstuffs (and thus increased income for crop producers), increased production of livestock end-products - giving food processors more business - and the greater availability of globally competitively priced high quality animal products for Ukrainian consumers.
With so many benefits of a strong animal agriculture in Ukraine, how do we go about accomplishing it? Professionals should (1) work with 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 Western funded professionals are already teaching throughout Ukraine these profit maximizing objectives can be accomplished.
A public and private investor partnership program to improve the livestock feeding industry in Ukraine could be broken into several targeted 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.
Feed control officials should ensure compliance with feed tag guarantees but should not do the "centrally planning thing" and dictate what the nutrient levels of the feed must be. They can make nutrient level recommendations, but unless there is a human and animal health consideration (such as with selenium), nutritionists, feed manufacturers and livestock feeders should be allowed to formulate to what they think will be the most profitable nutrient levels. At present the Ukrainian state feed control officials are "protecting" the feed consumer against making their own decisions, against feeding adequately fortified rations, against making a profit and against supplying high quality and economical food to Ukrainian consumers.
The Ukrainian feed manufacturers need (1) improved nutrition knowledge and (2) sources of supply for the needed nutrients. A Western feed manufacturing professional could help solve 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 usually there are few if any vitamins and minerals except salt and limestone (both are cheap) and little protein added to feed rations. There is more concern with filling the sack with something that adds weight than in supplying a feed that will profitably produce milk or meat or eggs.
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. Teaching nutrition and good feed mill manufacturing principles and serving as an information network on the availability of supplies would be obvious benefits. Suppliers could focus on reaching individual feed manufacturers via trade shows rather than traveling to see each local manufacturer. As a past president of the Oregon Feed, Seed & Suppliers Association, I know the benefits of industry organizations. We rewrote the Oregon Feed Control Law, which was passed into law. A Ukrainian feed manufacturers association could function similarly.
Producing good feeds satisfies the supply function but there must be demand for high quality feeds if they are to be fed. An 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." Income and costs should be carefully recorded. The concept of feeding for the highest profit rather than for the lowest feed cost should be emphasized.
Getting enough money for the feed mill to buy the necessary ingredients or for the feeder to purchase the prepared feed 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 profits, return the investment in half the time and double the number of pigs marketed. The resultant profit could internally finance expansion. Feeding animals poorly and realizing a loss isn't good business.
Involving the processors of milk, meat and eggs would also be beneficial. Helping food processors to establish quality standards for their suppliers of animal products and setting their purchasing prices accordingly would encourage livestock producers to produce higher quality commodities. This emphasis on quality would extend in both directions, including the feed manufacturer and his suppliers as well as the consuming public, who we are ultimately trying to satisfy.
A targeted market for improved animal end products could also be developed. There must be a demand in Ukraine among those that prefer meat in their bacon, meatier hams and pork chops that have a larger loin eye area with less fat covering.
It is possible for Ukraine to 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 (1) high protein oil meals (canola and soybean) and (2) grains will be benefited via increased demand for their products. Providing improved animal nutrition technology support to feed mills and livestock producers would strengthen a vital component of the infrastructure of the Ukrainian food production chain, removing a bottleneck that is keeping Ukraine from creating wealth and becoming globally competitive in animal agriculture production.
In summary, improved livestock feed quality would facilitate a larger animal production and processing industry. This would increase the demand for Ukrainian crops. Greater wealth would be created in Ukraine. Finally, Ukrainian consumers would benefit from the greater availability of less expensive and better quality domestically produced food.
Roy Chapin, Ph.D., Animal Nutritionist
11145 Chapin Lane, Amity, Oregon 97101
E-mail: <[email protected]>