Profitability of Poultry Production is Declining – Odunowo, MD Biacom

It was eye opener and bitter truth for poultry farmers at Ibadan on Wednesday July 31, 2019 during the one day poultry workshop organized by Poultry Association of Nigeria, Oyo state chapter.  “As at today, the Nigeria Poultry Industry is not too attractive due to declining profitability”. So declared Dr Adebayo Odunowo who had about 40 minutes to defend and elaborate on this statement as the guest speaker at the event.

Dr Odunowo, the president of Biacom Agro Nigeria Limited, a well grounded stakeholder in the poultry industry took his time to dissect and analyse the poultry industry in the country during the lecture and warned that unless the stakeholders resolve to strategise and run poultry as a real business, the collapse of the industry is imminent. Below are some excerpts from the lecture

“The Nigerian Poultry Industry is estimated at N1.6 trillion according to the Central Bank of Nigeria figure. Nigeria’s egg production is the largest in Africa with the 4th largest chicken population. In spite of its large size and great potential, the industry has not been able to realize its full potential.

So many people within the industry have claimed that the poultry sub sector of the Nigerian agricultural sector is considered one of the most productive sectors employing about 14 million Nigerians and contributing 25% to the GDP of the nation’s economy; while this is misleading, it sends a wrong signal about the state of the poultry industry to both current and potential investors. According to GDP report by the National Bureau of Statistics, the agricultural sector comprising crop production, livestock, forestry and fishing contributed 21,21 % in 2016, 21.06% in 2017, and 21.91 in the first quarter of 2019.  Crop production still remains the major driver of the sector, as it accounts for 85% of agricultural GDP; the implication of this is that the poultry industry contribution to the nation’s GDP might be less than 3% if contributions of other livestock species (such as ruminants, swine), forestry and fishing are all taken into consideration.

As at today, the production of animal protein falls far short of meeting the demands of our rapidly growing populations, this is, in spite of the fact that poultry is the most commonly kept livestock among all livestock species. Nigerian poultry farmers faces many problems and obstacles, which affects their growth, performance and profitability thereby diminishing their ability to contribute effectively to sustainable national development.

In relation to poultry industry, profitability is ability of a poultry enterprise to make profit from all its  farming activities; it is the profit generated that becomes the engine that drives the growth of the poultry enterprise. Most at times, especially among non financial experts, profit and profitability are used interchangeably, but in real sense, there is a difference between the two; while profit is an absolute term, profitability is a relative concept.

When poultry farmers make serious commitment to promote both growth side of their poultry enterprise while also acknowledging the importance of managing costs, they will create a strong foundation for their enterprise that can weather just about any future calamity. Unfortunately, this is not the case with poultry farmers in Nigeria.

In developing a strategic vision that will take the Nigerian Poultry Industry out of the woods and on the path of increasing profitability, there is need to carry out an appraisal of the poultry industry external and internal operating environment”.

He listed the internal operating environment to include price of day old chicks, feed, drug and vaccine as well as cost of building and machinery, depreciation, labour cost, repairs, maintenance and miscellaneous cost, length of egg production, broiler slaughter weight, carcass yield, FCR, mortality rate laying percentage etc. The external environment listed includes population demographies, societal values and lifestyle, government legislation and regulation, technological factors and the immediate external environment and competitive arena such as supply of inputs, substitute foods, rival; farmers, potential new farmers and the buyers of poultry products.

In conclusion Dr Odunowo detailed seven things that poultry farmers need to do in order to strategically run their poultry enterprise more efficiently and enhance its profitability and sustainability. These were categorized under  Marketing, Technology, Asset Discipline, Manage Cycles, Family and Legacy, Development of key Metrics and Intelligent Growth.

According to Dr Odunowo “It is going to take sound business practices and decision to remain profitable. So it is either we enhance, develop or hire expertise in the four management categories (Strategy, Animal Husbandry, Health and Nutrition, Marketing and Finance) or we allow our industry to collapse”.


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