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

March 2015Page 2

Bahta / Deblitz

Definitions and relevance of farm analysis


Definition of competitiveness

March 2015Page 4

„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)


Levels of competitiveness

March 2015Page 5

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)


How to measure and address competitiveness

March 2015Page 6

• 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 / Deblitz

The network at a glance


agri benchmark Beef and Sheep: an expert network

March 2015Page 8

• 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


Target groups and relevance

March 2015Page 9

• 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

Bahta / Deblitz

Countries in the agri benchmark Network 2015

March 2015Page 10

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

Bahta / Deblitz

Partners and supporters

March 2015Page 11

Main supporter

Institutional partners


http://www.afpc.tamu.edu/

http://www.lamolina.edu.pe/portada/

http://www.cna.org.br/

http://www.cepea.esalq.usp.br/english/

http://www.agro.uba.ar/trad/english/index.shtml

http://www.crpa.it/home/en/index.asp

http://www.argerind.at/

Bahta / Deblitz

Methods and data

Bahta / Deblitz

Typical farms – the principle

March 2015Page 13


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

March 2015Page 14


… 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

March 2015Page 15


Bahta / Deblitz

Typical farms – how to include smallholders

March 2015Page 16


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

Bahta / Deblitz

Selected results

Bahta / DeblitzMarch 2015Page 18

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 …


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

Measuring competitivenessMarch 2015Page 19

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


Bahta / Deblitz

Daily weight gain and net gain by production system (net gain = carcass weight divided by age at slaughter)

March 2015Page 21

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


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


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 %)


'05 '06 '07 '08 '09 '10 '11 '12 '13

USA

Argentina

Poland

Argentina

Brazil

China

110 %

130 %

150 %

290 %


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


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


Pasture

Silage


Bahta / Deblitz

Conclusions


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


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!!

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Measuring competitiveness of beef and sheep production on national and international level