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In this month’s editorial I have taken the liberty of assembling some facts-many of which came from talks at the recent Avi-Africa Poultry Expo - and then combined these with some of my own opinions, therefor drawing some conclusions about the future.

Firstly, the facts: Dr Simon Shane, formerly South African but now as American as pumpkin pie, told the assembly that the average maize farmer in the US receives some $11.00 of subsidies per ton of maize produced. In addition, there is a complex mechanism to ensure that farmers will always achieve a certain ‘floor’ price. Dr Shane asserts that because all maize is traded on the Chicago bourse, these subsidies have absolutely no influence on the world price of maize. A Brazilian speaker told us just why the Brazilian poultry industry was so competitive. It is true that the Brazilian’s have cheap land and labour and that their industry is highly integrated, but the real reason for their competitive advantage is that fact that they have cheap feed inputs in the form of maize and soya. Dr Shane also made mention of this, and maintains that the South African poultry industry will never be truly competitive until such time as we have cheaper feed ingredients. A very erudite gent from the South African National Department of Agriculture, speaking from the floor, agreed with both speakers on this point.

Three other important sources need to be added to the above information. In a press release celebrating the centenary of SAPA, Zach Coetzee showed just how much the poultry industry has grown. More importantly, Mr Coetzee points out that the poultry industry now consumes over 3 mil tons of maize per annum and is the country’ largest consumer of maize. My own research shows that the broiler industry has grown by more than 60% in the last decade. This means that maize consumption by broilers alone will have increased by some 350 000 tons per annum during the same period. Secondly, Fred Stephens, talking at the AFMA forum in March, informed us that the USDA believes that global grain consumption is expected to exceed production for the fifth straight year. As a result, world grain stocks are at very low levels. The price of maize in the US has risen by 18% over the last two years. We need to bear in mind that as global meat consumption increases, so too, will the demand for grain. Lastly, the Landbou Weekblad (April 7), reports that Mr Bully Bothma, Grain SA chairman, is urging grain farmers to plant less maize so that the prices that producers achieve will be higher. This despite the fact that plantings were down this season as it is, and that the famous record crop of 12 mil tons is unlikely to ever be achieved again.

When looking at the price of the feed inputs into the South African poultry industry as compared to both the Brazilian and US industries it is important to point out that both Brazil and the US are net exporters of maize and soya beans. This means that the price that they pay for their inputs does go up and down with world markets, but by and large they are stable. South Africa finds itself in a similar position with regards soya beans as we are net importers of protein (soya beans) and also suffer from the vagaries of the world market. As an aside, there is little doubt that we will need to produce more soya in South Africa in the future. More importantly though, we are erratic producers of maize. This means that at some times our price is determined by export parity and at others it is determined by import parity. Perceptions about the rainfall, the stock carry-over and the Rand/Dollar exchange rate cause our prices to oscillate wildly between import and export parity. This makes managing grain purchasing in South Africa both difficult and risky. The irony of the situation is that South Africa is only a net importer of grain every 7 or 10 years. The good news is that when maize is priced at export parity, South African poultry farmers enjoy really competitive inputs.

Now to Dr Shane’s argument that subsidies have no impact on the world price: I find that I must disagree with him here. Surely if you subsidise the largest producers of maize in the world, to the tune of about 10% of the selling price (this would be far higher if you looked at the net profit of the farming venture), and you guarantee that the producer’s price will not fall below a certain unsustainable level, you are going to encourage less competitive producers to stay in business. This would not only increase the world supply, but would also depress the market price. I am not sure that this is a bad thing for South African poultry producers. As our own price is determined by the world price, surely the lower the world price of maize the better for the poultry industry in all those years where South Africa are net exporters of maize?. Sadly, this is not true for the grain producers.

I can’t help feeling that Mr Bothma’s urging South African farmers to plant less maize so as to move the country closer to being net importers of maize, and in so doing increase the price, may be short sighted for a number of reasons. Firstly, if we have a real ‘misoes’ and a very small maize planting, there could be serious food security issues for the whole sub-continent. Secondly, as maize is the staple diet of much of our population a consistently high price would put severe pressure on the poor and would have a negative effect on inflation. Lastly, higher maize prices are ultimately going to make the maize industries biggest customer (the poultry industry) less competitive globally: and instead of growing as we are now, we could well see the industry shrink.

On a more positive note, South Africa is situated just south of the legendary "bread basket" of Africa. Things may have gone awry in Zimbabwe for the moment, but the grain and soya production in Zambia is increasing in a most encouraging manner. Although the infrastructure in terms of storage is not all that well developed in these countries, there are South African companies who have seen the possible advantages of producing grain in the north and storing it in the south where it will be used. There is nothing like a reliable market to stimulate production, so let’s hope that the supply of ingredients from our neighbouring countries becomes a reality. Remarkably, Mr Bully Bothma believes that South African maize farmers will be able to meet the World Food Programme’s (WFP) demand for extra food aid to deal with the Southern African food crisis. (Farmers Weekly, April 30).

How, then, do we as a country move forward? We find ourselves in the unenviable situation of being part of the global village where the free market reigns supreme. South Africa, along with many other smaller economies, does not enjoy any form of agricultural subsidies but the same can not be said about the Europeans and Americans. I am not suggesting that the state tampers with the price of maize in any way or implements any form of subsidy. However, the only way that we will continue to have cheap food for our people (both the staple food that they eat and poultry meat) is if grain production is promoted in some way. Perhaps some form of floor price mechanism could be implemented so that if the maize price falls below the production cost, the grain farmers would not run the risk of insolvency. This would be of great comfort to both emerging farmers and those farmers who farm in less than ideal conditions. We need to bear in mind that South Africa does not have the climate or soils that either the Brazilians or the US enjoy so our farmers are already at a disadvantage.

As the poultry industry-and so local consumption- grows, South Africa will move further away from being net exporters to becoming net importers of grain. Our average grain price will move closer to the import parity price and the poultry industry will find it more difficult to compete globally. With demand for grain increasing, world grain prices are unlikely to drop in real terms, which could further exacerbate our situation. The only consolation is that if the world price rises, so too do the input costs of all of the global players in the poultry industry.

The poorer members of our society are likely to become poorer and the government will struggle to keep food inflation under control. As an industry, we may well be forced to look North, both for a supply of ingredients or even as a centre for production. Let us hope for some form of state initiative to stimulate, rather than reduce, grain production in this country.

Because the broiler industry is rapidly expanding and because selection for greater body weight in broilers has been at the expense of egg lay, the production of more eggs is becoming increasingly important. For example, to meet global demands at current expansion rates, an extra 15 million broiler breeders will be needed annually to produce 1.5 billion more broilers for human consumption. To address this need, LSU AgCenter researchers have demonstrated the feasibility of increasing egg production in broiler breeder hens using chicken inhibin-based immunopharmaceuticals.

Inhibin is a peptide hormone produced in the ovary that acts as a brake on egg production. When an inhibin antigen is presented to the bird in the context of a foreign protein, the animal’s immune system is fooled into attacking inhibin. Similar to autoimmune diseases (for example, multiple sclerosis), the bird raises antibodies to - and thereby inactivates - endogenous inhibin, which in essence releases the brake on egg production. We have shown that immunoneutralization of inhibin by vaccination increases ovulation rates in quail, chickens (both egg- and meat-type) and turkeys.

Over the past nine years, LSU AgCenter scientists have been working in close co-operation with multiple corporate sponsors to develop safe, inexpensive and effective inhibin vaccines. The scientific development of these patented vaccines (chicken inhibin-based antigens) has led to the recent discovery of a more practical synthetic vaccine. The vaccine is comprised of a Multiple Antigenic Peptide (MAP) with a poly-lysine backbone linked to four peptides comprising the first 26 amino acids of chicken alpha-inhibin. When appropriately administered to breeder hens, it appears to be on track to produce an increase of around 10 percent in hen-day egg production during the industry standard 40 weeks of lay. This means that producers who use the vaccine could experience an increase in egg lay of about two dozen eggs per housed hen. This represents the single largest on-the-spot enhancement of reproductive performance in the history of the poultry industry. Indeed, it has taken the breeders of egg-type chickens about 20 years to achieve a lesser (about 7 percent) increase in egg lay by traditional methods.

Depending on management, the vaccine increases the onset, magnitude and duration of egg lay. Of equal importance, regardless of how the laying curve is affected, inhibin immunoneutralization has shown no untoward effects on eggs produced by vaccinated hens or on the chicks that hatch from these eggs. The intervention does not alter hen body weight and livability, egg size and egg shell thickness, the fertility and hatchability of eggs or livability of hatchlings to harvest age.

With the continued emphasis on selection for body weight in yield-type broiler breeders, overall egg fertility is declining at an alarming rate (about a half percent annually). This is most likely due to decreased gonadal function and copulation efficiency of large-bodied males. Marked declines in fertility are now commonly seen in flocks with aged males (more than 36 weeks old). This has caused producers to "spike" their old flocks with young males to increase fertility. This practice is expensive because additional flocks of males have to be maintained and risky from a bio-security standpoint because the standard "all-in, all-out" practice used in poultry is violated when young outsider males are introduced into established flocks.

Inhibin immunoneutralization of broiler breeders is a revolutionary approach that holds promise to change the poultry industry forever in a similar manner as bovine soma-totropin (BST) changed the dairy industry.

During June I was fortunate enough to spend a week in Tunisia. I was invited by the American Soybean Association (ASA) to form part of the team that presented a "Cours sur la Formulation des Aliments" at the Ecole Nationale de Médicine Vétérinaire in Tunis. The three-day course included a visit to a broiler farm. I was also able to spend a day with the nutritionists at Provital, a leading manufacturer of animal feed in Tunisia and a day with the staff of the Groupment Interprofessionnel des Produits Avicoles (GIPA), which is the body that controls the poultry industry in Tunisia.

Tunisia has a population of around 10 million, and apart from being the third largest producer of olives in the world, they also produce a wide range of agricultural products, including some excellent local wines. The country is said to be the most "European" of those countries in North-Africa but has maintained it’s essential African feel, which makes South Africans feel very at home there. The economy is doing well as is evidenced by the large number of new buildings and building sites that one sees. From a poultry perspective, the country has a small but vibrant poultry industry, and although Tunisia is Africa’s Northern most country, the structure of its poultry industry should be of interest to all African poultry producers.

Although the last day of my Tunisian trip was spent at the offices of GIPA, as arranged by Dr. Riadh Karma, it is here that I got a broad overview of the poultry industry in the country, so I will begin with this. Firstly, the most striking aspect of the Tunisian poultry industry is that production control is exercised via the offices of GIPA. This is achieved by a very simple method. Bird numbers are controlled by regulating the number of breeding birds that each of the 36 hatcheries in the country are allowed to keep. Hatcheries are rewarded for good production results and good record keeping. They are penalised for violating norms such as keeping flocks in lay for too long. All day old chicks have to be sold to producers that are registered members of GIPA. GIPA is essentially controlled by the Ministry of Agriculture and is funded through member subscriptions and a levy on imported feed ingredients.

The influx of some 5 mil tourists a year into Tunisia during the summer, coupled with religious festivities such as Eid-ul Adha and Ramadaan give rise to well established cyclical demand patterns. During times of surplus GIPA builds up stocks of broilers and eggs, which are later sold. In addition, they import hatching eggs during times of peak demand. The system would appear to be most effective, as the figures that I was shown would suggest that Tunisian poultry farmers are guaranteed a fair return at almost all times of the year. The profitability of the industry is also monitored by GIPA and to this end they do a complete audit of some 15 to 20 flocks per year.

Tunisian’s consume some 138 eggs per capita per annum, and some 260 farmers control the 5.3 million laying hens, most of whom mix their own feed. Surprisingly, most of the eggs produced are white. The story goes that during a Salmonella outbreak some years ago, white eggs were marketed as ‘clean’ and the practice and perception has continued. Sadly, I did not visit a layer operation. The egg industry is essentially static in line with the country’s population growth.

Broiler consumption is around 12 kg/capita per annum, with Turkey consumption at around the 3.5-kg mark. There are some 4000 broiler producer's in Tunisia, most of who buy feed from the small but dynamic feed industry. The farm that I visited, was in Boumell, just South of Tunis, and belonged to Mr Ben Slimane. It was the oldest farm in the group controlled by his family. Despite this, the old houses all had new nipple drinkers and feeder pans installed. Tunnel ventilation and wet walls were in the process of being fitted to all of the houses. The birds being produced were ISA broilers, which are an unfamiliar strain to me. The Tunisian industry no longer uses anti-biotic growth promoters in line with their European neighbours. The stocking densities used are in the 12 to 14 bird/m² range. As with South Africa, the market demands a 1.2 kg dressed bird, so most birds are processed at around 40 days of age. The broiler industry is growing at about 9% per annum.

From a feed perspective, nearly all of the ingredients used in the feed industry are imported, most in the form of maize and soybean meal. My personal exposure comprised a visit to the feed company Provital in Grombalia. I was impressed by their old but well maintained mill, their excellent laboratory and their staff. They showed me plans of a proposed new mill. I was able to not only learn more about the Tunisian feed industry, but was also able to have a look at their formulations. In broad terms their formulations are sound, and meet the market requirements, but the energy levels used are low compared to what I am used to. On the other hand, the layer diets contained protein levels of as high as 17%, which I felt was not entirely necessary.