Measuring competitiveness of beef and sheep production on national and international level
Transcript of Measuring competitiveness of beef and sheep production on national and international level
Bahta / Deblitz Policies for competitive smallholder production
GaboroneMarch 2015
Measuring competitiveness of beef and sheep production on national and international level
Conference on Policies for Competitive Smallholder Livestock ProductionGaborone, Botswana, 4-6 March 2015
Claus Deblitz (Thünen Institute of Farm Economics) and Sirak Bahta (ILRI)
Bahta / Deblitzagri benchmark Beef and Sheep
Contents
Definitions and relevance for farm analysis
The network at a glance
Method and data
Selected results
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Bahta / Deblitzagri benchmark Beef and Sheep
Definition of competitiveness
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„Competitiveness is the sustained ability of a firm, a company or a sector, to obtain and maintain market shares in regional, national and international markets under liberalised market conditions.“
Own translation based on Zeddies et al. (1999)
Bahta / Deblitzagri benchmark Beef and Sheep
Levels of competitiveness
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Competitiveness
Sectoral level Intrasectoral Intersectoral
Observation level Product / Production systemFarm-level
―Supply chain
―Farm-levelHousehold
Supply chain
Spatial level Interregional, International
Content level Productivity, economic, environment, animal welfare, social
Reference unit Land Output(return to land) (Product)
Labour(Wages and returns to labour)
Temporal dimension Short-, medium-, long-term
Source: Own illustration based on Brandes (1991) and Schmitt (1991)
Bahta / Deblitzagri benchmark Beef and Sheep
How to measure and address competitiveness
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• Market shares High or growing market share = high competitiveness A first indicator and required to describe the framework Can be distorted by market and policy regulation Reasons for differences typically missing
• Farm level analysis Competitiveness starts at farm level Millions of producers decide every day to continue, stop or change Measures of competitiveness are
productivity, cost of production, profitability Without knowledge of production systems analysis is difficult
Understanding agriculture worldwide is the motto of agri benchmark
Bahta / Deblitzagri benchmark Beef and Sheep
agri benchmark Beef and Sheep: an expert network
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• Our core competence:Production systems and their economics, drivers and perspectives
• An expert network which started in 2002 >>> more than just data• Global, non-profit, independent >>> credibility• Standardised methods >>> global comparability
Bahta / Deblitzagri benchmark Beef and Sheep
Target groups and relevance
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• Address global challenges with global overview and systematic expertise locally
Non-profit organisations
• Align future production through benchmarking and positioning
Producers and their organisations
• Operate successfully through in-depth understanding of markets and customers
(Agri)Businesses
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Countries in the agri benchmark Network 2015
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Measuring competitiveness
Countries with beef and sheep farm data
Countries with beef data only
Countries with sheep data only
2014 Countries Farms
Cow-calf 25 58
Beef finishing 31 76
Sheep 16 35
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Partners and supporters
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Main supporter
Institutional partners
Measuring competitiveness
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Typical farms – the principle
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Measuring competitiveness
Imagine you have a guest from a foreign country who is interested to see how beef farming is done in your country.
You would want to show your guest a farm that is • … located in an important beef producing region,• … using the common technology for beef production,• … running the prevailing production system,• … having a not too small and not too big size,• … using the prevailing combination of labour, land and capital.
In other words, you want to show your guest a typical farm!
Bahta / Deblitz
Typical farms – reasons to choose the concept
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Measuring competitiveness
… results can be generalised (contrary to individual farm data)… data sets reflect quantities (production systems data) and not just
moentary figures… data sets are consistent and reflecting reality of production systems
(contrary to surveys and averages)… it uses a feedback and vailidation loop with producers and advisors… it has proven to be applicable on a global scale and in countries
without or limited statistics and accounting data… it is cost-effective
Bahta / Deblitz
3. Expertise of researchers + advisors + producers> production system knowledge> explore adjustments to changes in frame work
conditions (forward looking results)
1. Statistics available to determine> important regions (‘hot spots’)> farm sizes and distribution
According to farm size
Large sized farm
Basis: All farms in a region
%
Farm size
Moderatesized farm
% of farms % of production
2. Focus groups of producers and advisors to> define prevailing production systems> collect data in a standardised way> validate results
Typical farms – three sources of data
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Measuring competitiveness
Bahta / Deblitz
Typical farms – how to include smallholders
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Measuring competitiveness
Productivity and performance indicators in small herds are difficult to measure (for example mortality, calving percentages).Approach: use the data of a whole village to estimate productivity and performance data
Include off-farm and household income where necessary
Estimate/allocate common grazing land to particular herders
Identify driving forces and incentives that go beyond enterprise and production system analysis
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ID-3
BR-2500ID
-2
CO-1100
UY-220
BR-1200
BW-30
AR-850
UY-115
ES-150
KZ-500
CA-800B
CN-140
ZA-250
CA-800A
AU-200
UA-295
ZA-400
CA-200APL-4
5
DE-1400
SE-100C
CZ-420
FR-80
UK-100
DE-100
UK-105
AT-25C
FR-80B
0
50
100
150
200
250
300
350
400
450
500 Adult cattle sold / going to finishing Weaners sold / going to finishing Breeding animals Cull animals
< 200 kg
200 – 300 kg
> 300 kg
kg live weight (LW) produced per cow and year
Total weight produced per cow from 100-400 kgs, weaners are main part but not all …
Measuring competitiveness
Bahta / Deblitz
Cow-calf enterprise not profitable long-term (total returns vs. total costs 2013)
AT-3
0DE
-100
DE-1
100
FR-8
0
ES-1
50U
K-70
UK-
105
IE-3
0SE
-95
UA-
410
RU-4
50CA
-200
ACA
-800
B
US-
160B
AR-8
50
UY-
115
BR-1
200
CO-4
00
CN-1
40 ID-2
ID-4
KZ-5
00AU
-200
AU-5
60AU
-880
ZA-2
50ZA
-400
NA-
290
BW-3
0
0
100
200
300
400
500
600
700
800 Opportunity costs
Cash costs + depreciation
Total returns
USD per 100 kg live weight sold
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Bahta / Deblitz
Production systems of beef finishingFeed % in
> 30%
> 30%
> 50% grains
> 30%
dry matter
pasture
silage and
and other
freshly cut grass
other forages
energy feed
& other vegetation
Management/
Outdoor
Closed or semi-
Confined, large,
Mix of pens and
Housing
year round or
open barns with
open pens,
grazing of paths
part of the year
slatted floors
partially with
and paddies
and/or straw bedding
sun-covers
Extent of
Low
Medium
High
Low
purchase feed
Pasture
Silage
Feedlot
Cut & Carry
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Bahta / Deblitz
Daily weight gain and net gain by production system (net gain = carcass weight divided by age at slaughter)
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g per day
ID-2
CN-9
40
AR-
630
MX-
1500
ES-5
500
US-
7200
CA-2
8K
BW-2
000
ZA-3
000
BR-6
80
NA
-600
AU
-320
AU
-150
AU
-375
CO-3
50
CO-1
30
CO-1
60
AR-
380
AU
-85
UK-
80
AU
-540
UK-
45
PL-3
0
PL-2
0
DE-
285
SE-2
30
DE-
800
DE-
280
CN-1
50
MA
-280
DE-
525T
AT-
25F
TN-4
5
FR-2
00
IT-9
10
IT-2
660T
SE-1
50
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Daily weight gain (g per day)Net gain (g per day)
Pasture
Feedlot
Silage
Cut &
Car
ry
Measuring competitiveness
Bahta / Deblitz
ID-2
NA-
25K
ZA-3
000
BR-6
80
PE-1
700
AU-1
5K
US-
75K
ES-5
500
ES-4
30
CN-2
000
NZ-
375
CO-1
60
BR-4
00
BR-8
00
AU-3
75
CO-3
50
BR-6
0
AU-5
40
AU-1
50
AU-3
20
AU-4
15
UA-
5600
CN-3
00
UK-
90
CZ-5
00
TN-4
5
FR-2
00
CN-1
50
IT-2
660T
MA-
280
SE-2
30
UK-
750
AT-1
20
AT-3
5
SE-1
00
UK-
45
AT-2
5F
0
200
400
600
800
1000
1200 Other costs Land costs Feed related costs (incl. labour) Animal purchase
Different cost composition but high and low cost in all production systems
USD per 100 kg carcass weight
PastureFeedlot Silage
Cut &
Car
ry
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Bahta / Deblitz
'05 '06 '07 '08 '09 '10 '11 '12 '130
100
200
300
400
500
600
700
800
900
South Africa
Australia
Austria
Spain
Germany
UK
Italy
France
Cost developments of selected farms and countries 2005-2013 (USD and %)
USD per 100 kg carcass weight
'05 '06 '07 '08 '09 '10 '11 '12 '13
USA
Argentina
Poland
Argentina
Brazil
China
110 %
130 %
150 %
290 %
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Botswana cost development similar to ZA?
Bahta / Deblitz
Most finishing farms are profitable on whole-farm level – other enterprise and direct payments reflected
Percentage of costs in total returns
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
AT-2
5FAT
-35
AT-1
20AT
-175
TDE
-260
DE-2
80DE
-285
DE-5
25T
DE-8
00FR
-60
FR-7
0FR
-200
ES-4
30ES
-520
ES-5
500
IT-9
10IT
-266
0TU
K-45
UK-
80U
K-90
UK-
750
IE-4
0SE
-100
SE-1
50SE
-230
PL-2
0PL
-30
CZ-5
00U
A-27
5U
A-56
00RU
-640
CA-2
8KU
S-72
00U
S-75
KM
X-1.
5KAR
-380
AR-6
30AR
-800
AR-2
6KU
Y-75
BR-6
0BR
-360
BR-4
00BR
-680
BR-8
00BR
-175
0CO
-130
CO-1
60CO
-350
CO-8
00PE
-170
0CN
-70
CN-3
00CN
-940
CN-2
000
CN-1
50ID
-2ID
-4ID
-100
KZ-8
00AU
-85
AU-1
50AU
-320
AU-3
75AU
-415
AU-5
40AU
-15K
NZ-
375
MA-
280
TN-4
5ZA
-300
0ZA
-75K
NA-
600
NA-
25K
BW-2
K
% of opportunity cost in returns % of cash costs + depreciation in returns
Europe
Asia, OceaniaAmericas
Africa
Measuring competitivenessMarch 2015Page 24
Bahta / Deblitz
DE-280
FR-70
PL-30
US-7200
AR-26K
CN-940
ZA-75K
AR-800
BR-800
CO-350
-200
0
200
400
600
800
1000
1200 Returns Margin Animal purchase Feed costs Land costs
Feedlot
Main drivers of costs and margins 2005-2013
USD per 100 kg carcass weight
Pasture
Silage
Measuring competitivenessMarch 2015Page 25
Bahta / Deblitz
Conclusions
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agri benchmark offers a framework to measure and assess methods for comparable farm (and sector) analysis which have proven
successful for more than 15 years on a global level tools for in depth analysis of data a platform for the exchange of experts and their knowledge
agri benchmark can make a contribution to informed decision making policy analysis (what if?) policy makers farm development and strategy producers and their organisations monitoring projects and programmes aid / funding organisations
Bahta / Deblitz
For further information
Measuring competitivenessMarch 2015Page 27
understanding agriculture worldwideClaus Deblitz
Thünen Institute of Farm EconomicsBundesallee 50, 38116 BraunschweigGermany
Tel.: +49-531-596-5141Fax: +49-531-596-5199E-mail: [email protected]: www.agribenchmark.org
www.ti.bund.de/bw
Sirak Bahta
International Livestock Research InstitutePrivate bag, 0033, Gaborone, Botswana
Tel.: +267-77586169Fax: +267-xxE-mail: [email protected]: www.ilri.org
Better lives through livestock!!