Impact of Meat Industry on Dairy Industry


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The presentation is about the impact of rising prices of buffalo meat in international markets on Milk production in North India.

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Impact of Meat Industry on Dairy Industry

  1. 1. PRESENTED BY: STUTI RUCHA (28045) VINEY RAO (28051) PRM-28 INSTITUTE OF RURAL MANAGEMENT ANAND Impact of High domestic and International buffalo meat prices on the milk production in North India
  2. 2. Objectives/ Research Questions <ul><li>To study the whole buffalo meat industry </li></ul><ul><li>To find out whether there a significant impact of the increase in buffalo meat prices on the milk production in North India </li></ul><ul><li>If, yes its extent </li></ul><ul><li>To find out the future prospects of relative economics of milk and meat industry </li></ul><ul><li>To identify the measures which could be taken to reduce the shift of lactating animals towards slaughter </li></ul>
  3. 3. Methodology <ul><li>Desk research </li></ul><ul><li>Snowball Sampling </li></ul><ul><li>Visits to Slaughter houses, abattoirs, cold storages, transporters, traders etc. for understanding the supply chain </li></ul><ul><li>Visits to the Livestock Markets (Mandis) </li></ul><ul><li>Farmers’, slaughterers’ and intermediaries’ surveys </li></ul><ul><li>Visits to the APEDA, Municipal corporation and other district administration offices for collection of secondary data </li></ul>
  4. 4. Buffalo meat Industry (Cara beef) <ul><li>Indian buffalo meat exports: 483000 MT (Rs.3500 crores) </li></ul><ul><li>95% of the total meat exported </li></ul><ul><li>53% (90-93 million) of the world buffalo population </li></ul><ul><li>55% of the milk production by buffaloes </li></ul><ul><li>Around 11-15% slaughter rate, states variation (10-23%) </li></ul><ul><li>Consumer perception: </li></ul><ul><ul><li>Low cholesterol, </li></ul></ul><ul><ul><li>leanest among red meat </li></ul></ul><ul><ul><li>White fat as carotene </li></ul></ul><ul><ul><li>No differentiation in he and she buffalo meat </li></ul></ul><ul><ul><li>Preference towards Veal </li></ul></ul><ul><li>US & UK are biggest markets (Indian meat exports very limited) </li></ul>(Source: APEDA and FAO)
  5. 5. Rise of the Indian buffalo meat industry <ul><li>Four bovine meat producing clusters: NA, SA, OC & EU </li></ul><ul><li>EU: </li></ul><ul><ul><li>Mad cow & BSE in 90’s </li></ul></ul><ul><ul><li>Reduced agri subsidies </li></ul></ul><ul><ul><li>Increasing prices & strengthening Euro, </li></ul></ul><ul><ul><li>1993 (83200 MT net export), 2003 (73000 MT net import) </li></ul></ul><ul><li>Present Meat deficit regions: Central America, Caribbean, Russia and CIS, Africa, Middle East, and East Asia </li></ul><ul><li>FMD control programme in India (2003) </li></ul><ul><li>Indian Meat: Nearly organic </li></ul><ul><ul><li>Competitive price </li></ul></ul><ul><ul><li>No Mad Cow Disease or Bovine Spongiform Encephalopathy (BSE) </li></ul></ul><ul><ul><li>Good proximity to ASEAN and Middle eastern countries </li></ul></ul><ul><ul><li>Presence of integrated meat processing facilities </li></ul></ul>(Source: Agricultural summit 2005)
  6. 6. Thrust to meat industry <ul><li>NMPPB </li></ul><ul><li>Inclusion of meat in VKGUY </li></ul><ul><li>Restoration of DEPB rates </li></ul><ul><li>11 th Five year plan Meat & poultry: 10%, dairy : 5% </li></ul><ul><li>APEDA’s Support </li></ul>
  7. 7. Buffalo meat exports On A Rise!!! Source: Export figures from APEDA
  8. 8. Industry structure <ul><li>Integrated abattoirs: Export oriented </li></ul><ul><li>Meat processing Plants: Export oriented </li></ul><ul><li>Unorganized & unauthorized slaughter slabs: Domestic consumption </li></ul><ul><li>15 Integrated abattoirs, 171 Partially integrated Meat processing plants, 3900 MC slaughter houses, >12000 slaughter slabs </li></ul><ul><li>( Source : Report of animal husbandry, planning </li></ul><ul><li>Export oriented units: Certification from APEDA, Ante Mortem & Post Mortem tests </li></ul>
  9. 9. Industry ( Source: APEDA) S. No Company Processing Plant Location Capacity Annual Capacity (tones) 1. Allanasons Fully Integrated Partially integrated Unnao Sahibabad 90,000  50,000 2. Hind Agro Industries Ltd Fully Integrated Partially Integrated -Do- -Do- -Do- Aligarh, U.P. Sahibabad, UP Meerut, UP Khurja, UP Lawrence Road, New Delhi 120,000 50,000 25,000 20,000 20,000 3. Fair Exports Fully Integrated Barabanki, UP 50,000 4. MKR (Abbott) Fully Integrated Dera Bassi, Chandigarh, Punjab 40,000 5. Punjab Meat Limited Fully Integrated Bassi, Punjab 50,000
  10. 10. Fore quarters Hind quarters Boneless buffalo meat products
  11. 11. Integrated abattoirs <ul><li>Live animals procured </li></ul><ul><li>Farmers or traders, Own Farms or Mandis </li></ul><ul><li>Veterinary facilities in some areas </li></ul><ul><li>Identification codes to the traders </li></ul><ul><li>Demand requirement in advance </li></ul><ul><li>April- May is lean season for supply (harvesting season) </li></ul><ul><li>Peak period of demand is around Id and Christmas. </li></ul><ul><li>Lean season of demand March to July </li></ul>
  12. 12. Procurement rates (Source: PML as on 13-11-08) <ul><li>Terms & Conditions </li></ul><ul><li>Young veal should not be below 30 kilograms otherwise it would be rejected for slaughtering. </li></ul><ul><li>Payment is done twice in a week (on Monday and Thursday. </li></ul><ul><li>Animals above the age of 8 and below the weight of 30 kilograms are not accepted for slaughtering. </li></ul>Weight (in kilograms) Rate(in rupees) 225 and above 64 191-225 63 171-190 61 151-170 58 100-150 52
  13. 13. Contd… <ul><li>Charge of transportation is 3.6 rupees per kilogram from factory (Delhi) to Port (Mumbai) </li></ul><ul><li>Demand in the importing countries  Factory meat prices </li></ul><ul><li>Allana Market Leader (Factory procurement price) </li></ul><ul><li>The other parts of buffalo are used: </li></ul><ul><ul><li>Bones: Poultry feed </li></ul></ul><ul><ul><li>Hides & skin: Leather industry </li></ul></ul><ul><ul><li>Horns: Decorative items, Button industry etc </li></ul></ul><ul><ul><li>Fat: Soap industry, biofuel (proposed) </li></ul></ul><ul><ul><li>Blood: Pharmaceutical industry </li></ul></ul>
  14. 14. Operations of Integrated Abattoirs Animals received Examination & Washing Halal by Mullah Sterilisation from CBG Removing of Horn & Hooves Removal of Offal and Hides Washing & Weighing Removal of Unwanted Fat Making pieces of Carcasses Deboning & Deglanding Chilling for 24 Hours Packaging & Freezing Final packing (Lamination) Storage & Shipment
  15. 15. Meat processing plants (Intermediaries) <ul><li>Slaughtered animal from MC slaughter houses (Via traders) </li></ul><ul><li>Declares the procurement price (Factory price) on each day </li></ul><ul><li>Able to export just because of seal of municipal corporation on carcass </li></ul><ul><li>Deals in all major products </li></ul><ul><li>Some owned by groups who also have integrated abattoirs in other locations. </li></ul>
  16. 16. Operations at the MC Slaughter house & Meat Processing units <ul><li>a </li></ul>Animal is ‘Halaled’ Transported to factory Animal is cut into 4 pieces (Head, Body, Hind Limb & Fore Limb Skin of animal is removed Animals Received Washed Chilled for 2-3 hours (0-5 degree Celsius) Deboning Transportation to Mumbai Shipment to importing countries Packaging Butcher gets Rs.50 Trader gets a commission of 50 Paisa/Kg.
  17. 17. Slaughter slabs (Retail shops) <ul><li>Situated in particular localities (Proximity to Mandis’) </li></ul><ul><li>Buffaloes are procured from Mandi directly by retailer </li></ul><ul><li>Butchered in very unhygienic conditions </li></ul><ul><li>Price is determined by the arrivals in the Mandi and the factory price </li></ul><ul><li>Meat with bones and fat </li></ul><ul><li>Sizes as per the customer demand </li></ul><ul><li>Generally a margin up to Rs.3-5/Kg is involved </li></ul><ul><li>Besides that, hides, skin and other valuable part of an adult buffalo is sold at around Rs.1600 </li></ul>
  18. 18. Role of Municipal Corporation <ul><li>Majority of the animals are slaughtered for domestic purposes </li></ul><ul><li>Just provides space for slaughtering and does not act as intermediary </li></ul><ul><li>Provision of anti-mortem and postmortem tests but not done </li></ul><ul><li>Limits of number of buffalo slaughtering are fixed by some high courts </li></ul><ul><li>Only registered butchers allowed to operate </li></ul><ul><li>Collects Tax (hygiene fee) from the butchers/traders </li></ul>
  19. 19. Role of livestock Mandis <ul><li>Different Mandis or productive (lactating) and unproductive (‘Fantar’) animals </li></ul><ul><li>Mostly held on a particular week day or on a particular dates </li></ul><ul><li>Festive seasons </li></ul><ul><li>Either controlled by the district administration or contractors </li></ul><ul><li>Seller: Entry fees, Buyer: 2-4% tax </li></ul><ul><li>Buffalo for slaughter houses in ‘Fantar Mandis’ </li></ul><ul><li>Price is based on weight speculation </li></ul>
  20. 20. Contd… <ul><li>15% are adult males, 10% are male calves and <1% female calves (Having any problem, mother dies) </li></ul><ul><li>10% lactating buffaloes (economically unviable) </li></ul><ul><li>Price of a productive lactating buffalo is determined by </li></ul><ul><ul><li>Frame- 15% </li></ul></ul><ul><ul><li>Dairy Character- 20% </li></ul></ul><ul><ul><li>Body Capacity- 10% </li></ul></ul><ul><ul><li>Feet and Legs-15% </li></ul></ul><ul><ul><li>Udder- 40% </li></ul></ul>
  21. 21. Impact on meat industry on milk production Milk production (in 000 tonnes) ( Source: APEDA)
  22. 22. Contd… Milk production (in 000 tonnes) ( Source: APEDA)
  23. 23. Buffalo population in India (Source: Livestock Census)
  24. 24. Composition of buffalo population (Livestock Census 1987,1992 and 2003: Pan India and states figures) Group Percentage of total population Male (Under 1 Year) 5-8% Male (1-3 Years) 3-4% Male (over3 Years) 6-8% Total Male population 15-20% (1.75 for breeding) Female (Under 1 Year) 12-16% Female (1-3 Years) 10-15% Female (Over 2.5 Years) In Milk 33-38% Female (Over 2.5 Years) Dry 13-16% Female (Over 10 years) 4-6% Female (Over 2.5 Years) Not yet Calved 3-5% Female (Over 2.5 Years) Mastitis or any other infertility problem 1%
  25. 25. Dairying and Slaughtering Any Effects!!! Correlation coefficient between A & B is +0.979598053 Correlation coefficient between A & C is +0.819653 Source: FAO and Year Buffalo population (In Million) Total milk production (In 000 Tonnes) A Buffalo meat export (In 000 tonnes) B Buffalo meat production(In000 tonnes) C 1987 75.97 51.4 59.14 207 1992 84.21 58 82.51 1182 1997 89.92 72.1 176.38 1365 2003 97.92 86.2 297.9 1467 2004 - 88.1 343.82 1483 2005 - 92.5 337.78 2006 - 97.6 459.94 2007 98.7 100.9 494.11
  26. 26. Milk Production, Meat Production &Meat exports Source: FAO and
  27. 27. Buffalo rearing.. Dry Fodder: Rs.2/Kg. Green fodder: 50Paisa/Kg. Concentrate: Rs.8/Kg Labor charges: Rs.20-25 for adult & Rs.10-15 for young animal per day Source: Survey of dairy farmers of U.P., Haryana & Punjab Age Group Requirement of Dry fodder (In Kgs.) Requirement of Green Fodder (In Kgs.) Requirement of Concentrates (In Kgs.) Milk Yield (In Litres) Approxim-ate weight Daily Expenditure Below 1 year 2.5 1 0 0 80-100 Kgs. Rs.15 1-3years 5 2 .10 0 200-250 Kgs. Rs.25 3-8 Years 8-10 10 5 13 250-400Kgs. Rs.60 8 years & above 8-10 10 3 10 400-450Kgs. Rs.60
  28. 28. Reproduction & Lactating cycle 3 Year Animal 310 days Pregnancy 2-3 months milking AI Parturition AI 6-7months milking Dry for 2-3 months
  29. 29. Our field study… <ul><li>Adult ‘Fantar’ buffalo: Rs.45-55/Kg. (Rs.6000 to 14000/animal) </li></ul><ul><li>Calf: Rs.2000 to 3000 </li></ul><ul><li>Lactating buffalo: Rs.25000-Rs.50000 </li></ul><ul><li>Separate Mandi’s </li></ul><ul><li>Milk and Meat prices </li></ul>
  30. 30. Looking into future…. Source: Kerala Livestock Development Board Supply and demand of green and dry fodder in India (Estimates 2025) (in million MT) Year Supply Demand Deficit as a % of demand Green Dry Green Dry Green Dry 2005 389.9 443 1025 569 61.96 22.08 2010 395.2 451 1061 589 62.76 23.46 2015 400.6 466 1097 609 63.5 23.56 2020 405.9 473 1134 630 64.21 24.81 2025 411.3 488 1170 650 64.87 24.92
  31. 31. Future forecasts <ul><li>CAGR of buffalo meat prices for the last 4 years: 16.06% </li></ul><ul><li>Export meat price/kg. in 2010-11: Rs.114.79/Kg. </li></ul><ul><li>Factory Price of buffalo meat in 2010-11: Rs.95-97/Kg </li></ul><ul><li>CAGR of milk for last 4 years: 4.92 % </li></ul><ul><ul><li>(Source: Milk price index ) </li></ul></ul><ul><li>Milk price in 2010-11: Rs. 28.8 </li></ul><ul><li>Improved livestock health, US & EU Markets </li></ul><ul><li>USDA  Production increase @5 per cent (2.8 million tonnes in 2009) </li></ul>
  32. 32. Domestic consumption Rise!!! <ul><li>USDA report Increase @ 7 per cent in India </li></ul><ul><li>&quot;India’s exports are foreseen to remain firm at 8.1 lakh tonnes, the bulk of the expansion is driven by increasing domestic consumption&quot; </li></ul>(Source: USDA and Asian buffalo magazine)
  33. 33. Conclusions <ul><li>At present there is no significant impact of buffalo meat industry on milk production </li></ul><ul><ul><li>The correlation coefficient b/w buffalo meat production & Milk production is +82% </li></ul></ul><ul><ul><li>The correlation coefficient b/w buffalo meat exports & Milk production is + 97 % </li></ul></ul><ul><ul><li>Whole supply chain (Mandis’) of productive and unproductive animals is different </li></ul></ul><ul><ul><li>Milk: Rs.25/Kg, Daily expenditure: Rs.60/kg, Break even: 3 litres/day </li></ul></ul><ul><ul><li>The present slaughter rate of 10.9% (Source: FAO estimates) </li></ul></ul><ul><li>Pressure on limited resources </li></ul><ul><li>Threat: Milk & meat prices </li></ul><ul><li>Incentives to the buffalo meat industry </li></ul><ul><li>New markets </li></ul>
  34. 34. Measures possible to adopt <ul><li>Demand for equal thrust to dairy industry (Level playing field) </li></ul><ul><li>Animal registration, Proper education </li></ul><ul><ul><li>Only those buffaloes which are either non lactating or economically unviable are sent for slaughtering. </li></ul></ul><ul><ul><li>Buffaloes from all parts of country are sent for slaughtering as soon as they become economically unviable. </li></ul></ul><ul><ul><li>Weight loss: Loss to farmer & Meat industry </li></ul></ul>
  35. 35. Status in Gujarat <ul><li>Same as in other parts of the country </li></ul><ul><li>Meat production for domestic demand </li></ul><ul><li>MC Slaughter houses and slaughter slabs </li></ul>
  36. 36. Limitations of the study <ul><li>Project coverage </li></ul><ul><li>Unorganized industry </li></ul><ul><li>Illegal activities (Secretive nature) </li></ul><ul><li>Institutional support (outsider’s view) </li></ul>
  37. 37. Dying on the Edge….
  38. 38. Brutally Slaughtered
  39. 39. Aftermaths…
  40. 40. Supreme court Orders !!!!
  41. 41. Food Safety!!!
  42. 42. Thank You