2. Rabbit farming
An evaluation of the Crusader R&D
program
A report for the Rural Industries Research
and Development Corporation
by Jenny Gordon and David Garrett,
Centre for International Economics (CIE)
February 2004
RIRDC Publication No
03/144
RIRDC Project No CIE-
19A
4. Foreword
This report evaluates the Crusader rabbit program, a project funded by RIRDC and
CSIRO and undertaken by CSIRO.
The R&D project established a rabbit herd at CSIRO’s Pastoral Research Laboratory at
Armidale. The main research undertaken aimed to:
ƒ estimate genetic parameters for traits such as number of kittens weaned per litter, average
daily
live-weight gain and disease resistance;
ƒ use this information to design and validate a breeding program;
ƒ with commercial breeders, systematically quantify production parameters and develop
simple
software to manage data and formulate practical systems of performance recording and
rabbit
selection; and
ƒ disseminate results and technical updates through existing industry networks.
The purpose of this study was to assess the impact of the research in the first phase of the
program on the rabbit industry. To estimate adoption rates and effectiveness of practices when
adopted CIE
conducted a survey of rabbit farmers. The survey covered experience with the Crusader
program (adoption and the results), grower knowledge of the size and characteristics of the
rabbit farming industry, and expectations for the future of the industry.
The returns have been mainly through improved animal husbandry practices rather than from
the
breeding component of the program. The rate of return was estimated as 15 per cent on the
R&D
investment. This study also utilised information provided by researchers to assess the
potential
impact of the current phase of the research program. The potential returns from improved
breeding
performance are similar to the current rate of return. The returns are relatively modest as the
industry
is well established with a number of large successful producers. While both large and small
producers did benefit from the program the gains were greater for the smaller producers and
newer
entrants.
This project was funded from RIRDC Core Funds which are provided by the Federal Government.
This report is an addition to RIRDC’s diverse range of over 1000 research publications and
forms part of our evaluation of the Crusader R&D program.
Most of our publications are available for viewing, downloading or purchasing online
through our website:
ƒ downloads at
www.rirdc.gov.au/fullreports/Index.htm ƒ purchases
at www.rirdc.gov.au/eshop
Simon Hearn
Managing Director
Rural Industries Research and Development Corporation
6. Contents
Foreword...................................................................................................... ...iii
Executive Summary ......................................................................................... . v
1 Introduction............................................................................................... ... 1
Method of assessment ..................................................................................................... 1
2 The rabbit industry....................................................................................... . 3
Estimating industry supply ............................................................................................ 3
Estimating industry demand ......................................................................................... 9
3 Program performance ................................................................................. 12
The cost of the research program ................................................................................. 12
Summary of program outputs....................................................................................... 12
Estimating adoption and effectiveness ....................................................................... 14
Experimental impact scenario ...................................................................................... 17
4 Implications for the future .......................................................................... 19
Implications of an expansion in supply ...................................................................... 19
Concerns and challenges facing the industry ............................................................ 19
Implications for the future ............................................................................................ 21
Survey of Rabbit Farmers................................................................................. 22
Bibliography................................................................................................ ... 29
Charts
Chart 2.1 Distribution of size of rabbit farms .............................................................. 4
Chart 2.2 Estimated size of Australia’s farmed rabbit industry ................................ 5
Chart 2.3 Supply curve for the farmed rabbit industry .............................................. 6
Chart 2.4 Relationship between farm gate and wholesale prices.............................. 7
Chart 2.4 Relationship between farm gate and wholesale prices (continued) ........ 8
Chart 2.5 Example value chain — values in $ per rabbit............................................ 9
Chart 2.6 Estimated demand curve ............................................................................. 10
Chart 2.7 Expected future wholesale price and quantity combinations................. 11
Chart 3.1 Share of survey respondents who sought information ......................... 15
Chart 3.2 Adoption of specific outputs and reported benefits from Crusader
(numbers of farms)........................................................................................... 16
Chart 4.1 Perceptions of threats to the industry ........................................................ 20
Chart 4.2 Factors affecting demand for farmed rabbits ............................................ 21
Tables
Table 2.2 Estimates of farm numbers and farm size...................................................... 6
Table 3.1 Annual research costs for the Crusader project RIRDC budget ........... 12
Table 3.2 Effectiveness of outputs when adopted ................................................... 16
Table 3.3 Benefits for the Crusader farmed rabbit project using the best
case scenario of the researcher’s estimates ................................................ 17
Table 3.4 Results of the benefit cost analysis for the Crusader
farmed rabbit project based on the survey responses................................ 18
iv
7. Executive Summary
This report evaluates the Crusader rabbit program, a project funded by RIRDC and
CSIRO and undertaken by CSIRO. The R&D project established a rabbit herd at CSIRO’s
Pastoral Research Laboratory at Armidale. The main research undertaken aimed to:
ƒ estimate genetic parameters for traits such as number of kittens weaned per litter, average
daily
live-weight gain and disease resistance;
ƒ use this information to design and validate a breeding program;
ƒ with commercial breeders, systematically quantify production parameters and develop
simple
software to manage data and formulate practical systems of performance recording and
rabbit
selection; and
ƒ disseminate results and technical updates through existing industry networks.
As part of the work, all aspects of animal husbandry had to be considered, and the technical
advice
generated by the project, included information on establishment and set-up costs. To the
extent to
which this also improved the guidelines for ‘benchmark’ practices the project went beyond the
breeding objectives. As the evaluation demonstrates it is this aspect of the work that has
proved most
beneficial to the industry to date. However, the benefit is not uniform across all rabbit
producers.
The benefits to date flowing from the project are largely from animal husbandry and
management information and bring a return of 15 per cent on the R&D investment
The approach taken to evaluation was to survey industry members on their awareness,
adoption and effectiveness of various aspects of the project. The responses showed that the
animal husbandry and other management advice had been the most valuable output of the
project. This response was not uniform suggesting that ‘top’ producers were already achieving
the benchmarks and the value was for newer entrants and farmers with less capacity to
undertake their own research.
Based on estimates of industry size from the survey the respondents produce around 40 per cent
of
total farmed rabbit meat. Assuming that the rest of the industry adopt the results of the project
at the
same level as the survey respondents by 2006 and achieve similar results in practice, the net
present
value of the project is estimated to be $1.25 million, and internal rate of return of 15 per cent
for a cost
(in present value terms) of $0.34 million. This gives a return of $3.7 for every dollar invested in
the
R&D.
The breeding program results have not translated through to industry to date
The results on breeding were very mixed with around half of the farmers who purchased breeding
stock not reporting an improvement. Whether this is an accurate indication depends on the
capacity of farmers to monitor performance. The researchers suggest that most producers
would find it very
difficult to assess the merit of one source of animals against another, as they do not keep
performance records to allow progeny testing. In addition, the difference in genetic merit
between the Crusader
8. stock and industry population as this point in the breeding program is not expected to be large
as the stock produced is only 2-3 generations into the breeding program. The benefits of
industry breeding programs accrue over time at a steady but slow rate. To date the breeding
advice, and possibly the
software, seems to have been more useful.
If they can be achieved on farm they will be of similar value
The breeding program has been shown to deliver a 5 per cent increase in the number of kittens
weaned
and a 10 per cent improvement in average daily growth rate. Running these productivity
‘shocks’
v
9. through the Enterprise model and assuming adoption rises to 70 per cent the benefit is
estimated as $1.55 million, a 16 per cent rate of return. This estimated benefit is lower than
had been estimated by Prayaga and Eady (2000) which did not factor in adoption rates.
Long term benefits will depend on industry growth but only if in response to
rising demand
The approach taken in this study holds constant the total production of rabbit meat at the projected
growth rate for the industry. This approach understates the benefits of the R&D to the extent to
which the growth in the industry is a result of the R&D outputs of the project. The value of this
expansion in the industry depends on the alternative uses of the resources. If these are very
similar to the value
added in the rabbit farming industry then the net benefits from the expansion of the industry are
small. To the extent to which rabbit farming is a lifestyle choice the net impact on value added
is uncertain. In addition, the impact of an expansion in supply on price, independent of growth
in demand, is to
push prices down. This price response lowers the net benefits of any R&D induced expansion
in
supply. Market analysis by Foster (1999) suggests that demand is relatively price sensitive and
so the supply response will drive down prices, all else equal.
Producers are optimistic for the future of the industry, but expectations
are that it will remain a ‘niche’ industry
The survey also sought information on the expectations for the future of the industry. The
information suggests that:
ƒ consolidation will continue with growth in the average size of rabbit farms (currently
100 does
compared with 57 in 1999); with smaller players dropping out of the market;
ƒ production levels will continue to grow steadily at around 14 per cent a year to 2005, slowing to
10 per cent to 2008, and 8 per cent to 2015 — much lower than the projected growth rate of
31 per
cent made in 1999, but consistent with historical growth rate of 10 per cent from 1999 to
2003;
ƒ price expectations are for a steady rise in price, with wholesale prices rising from the current
reported median price of $7.50/kg meat to $12.20/kg meat by 2010. The information
provided by the survey and the project suggests that prices declined from 1999 to 2001
and have risen since 2001. This recent rise is consistent with expectations of future price
increases;
ƒ the survey suggests that rabbit is not expected to become a ‘supermarket meat’, nor is it
expected
to be replacing wild rabbit, growth in demand must be driven by ‘niche’ market
development. This
is consistent with the project reports that when speaking to the processors they say the
demand is
coming from specialty meat wholesalers, butcher shops and restaurants. Their current
assessment
is that they are getting trade enquiry of approximately 3-4 times the level of rabbits that they
can
supply; and
ƒ key issues for the industry are:
- feed prices;
– disease, including calici virus and myxomatosis;
– regulation;
– slaughter and processing;
– ensuring a clean industry profile; and
– promotion and marketing of rabbit meat.
11. 1 Introduction
Rabbit meat has been a source of nutrition for Australians since 1859, when twelve pairs of wild
rabbits were released in Winchelsea, 109 kilometers east of Melbourne. However,
myxomatosis, calici virus, droughts and rabbit trapping have made wild rabbit an increasingly
unreliable source of meat; and the production of wild rabbit has decreased dramatically. Rabbit
farmers are hoping to step in and capture this increasing gap in the market.
In 1999, CSIRO and RIRDC commenced a three-year R&D program, the Crusader
program, to promote the viability of the rabbit farming industry. The goals were to:
ƒ estimate genetic parameters for traits such as number of kittens weaned per litter, average
daily
live-weight gain and disease resistance;
ƒ use this information to design and validate a breeding program;
ƒ with commercial breeders, systematically quantify production parameters and develop
simple
software to manage data and formulate practical systems of performance recording and
rabbit
selection; and
ƒ disseminate results and technical updates through existing industry networks.
A second project funded in 2002 for 5 years is designed to increase the productivity of rabbit
farming enterprises, reduce costs and manage disease. The focus of the project is on
identifying and
implementing methods to improve key profit drivers. Individual areas of work identified by
industry as high priority are management of disease, improved survival of kittens and growers,
optimum
nutrition and benchmarking performance. The project aims to deliver information systems,
feed
formulations and improved genotypes to optimise productivity and profit. This report assesses
the
success of the first RIRDC Crusader program. It also assesses the potential value to the
industry if the breeding result of the program can be achieved by farmers through purchase of
superior breeding
stock. The outcome of this report will provide a guide to RIRDC and CSIRO of the potential
future
direction for R&D into the rabbit farming industry.
Method of assessment
A benefit cost analysis (BCA) is undertaken to estimate the impact of the Crusader program up
to and including 2002. It also assesses the potential future impact of the program if breeding
results are
realised on commercial farms. As the future of the industry is uncertain a range of scenarios for
future industry development are utilised. The Crusader program was able to provide an
assessment of the improvements achieved under program conditions. The impact of the R&D
depends on the adoption of the program outputs and on the effectiveness of these outputs in
practice. These are clearly related, with the anticipated effectiveness one of the key factors
influencing adoption.
To estimate adoption rates and effectiveness of practices when adopted CIE conducted a
survey of rabbit farmers. The survey covered experience with the Crusader program (adoption
and the results), grower knowledge of the size and characteristics of the rabbit farming
industry, and expectations for the future of the industry.
The survey
12. CSIRO provided CIE with contact list of 163 rabbit farmers and processors (this excluded feed
companies, vets and international farmers on the CSIRO contact list). Rather than sending out an
unsolicited survey to these farmers the approach taken was to contact them to see if they would be
willing to respond to the survey before it was sent. This approach has two advantages. The first
is that
it is easier to assess response bias, due to people having left the industry not responding or
non-
response due to other influences. The second is that it helps create a sense of obligation to
return the
1
13. survey and understanding of the reasons behind the survey for a sector of the population who
are often the target of surveys and may well suffer from survey fatigue. A previous report on
Rabbit production (Wondu Holdings 2001) was based on a sample of only 8 survey responses,
and it was imperative that a larger sample be acquired to conduct an effective evaluation of the
R&D program.
Twenty-one per cent of farmers contacted had left the industry
Telephone numbers were obtained for 77 farmers, of which five were wrong numbers. We
managed to get in contact with 43 of the remaining 72 farmers (60 per cent). Of these two
expressed no interest in the survey. Nineteen of them were faxed the survey, 8 were emailed the
survey and 5 had the survey
posted. The remaining 9 (21 per cent) had ceased operations and did not want to participate in
the
survey. This included some of the farmers who had donated rabbits at the commencement of the
program. An additional 26 surveys were posted out to farmers who we had not been able to
contact but who were flagged as serious producers on the CSIRO list, bringing the total of
posted survey to 31 and the total number of potential survey responses to 58. Overall 31 farmers
responded, a response rate of 53 per cent. The responding farmers represent 24 per cent of the
original sample (assuming that the
dropout rate is the same across the 163 farmers). It is highly likely that there is a much greater
proportion of the industry (see the analysis on industry size).
None of the people contacted listed as starters had entered the industry
In addition to people classified as ‘farmers’ in the CSIRO list was contact details of 61 starters. Of
these 61 we managed to contact 29 (48 per cent), none of who had taken up production. The
fact that
none of the people contacted had started production is significant and reflects the fact that
interested
parties have not transformed this interest into an active investment. The reasons given for not
having
started production varied, however feed costs were a significant factor in lack of economic
attractiveness.
This report
This report presents the evidence from the survey and from a review of the literature on the
rabbit industry to provide an:
ƒ assessment of the current industry size and characteristics and the expected future growth
of the
industry;
ƒ evaluation of the impact of the Crusader program to date and expected potential; and
ƒ implications for the future of the industry, including an assessment of the key factors
influencing
the future industry outcomes drawn from the survey.
15. 2 The rabbit industry
Prior to 1996, most of Australia’s rabbit industry was based around wild rabbits, although a small-
farmed rabbit industry existed in Western Australia. In 1996, the value of the wild rabbit
industry was estimated at $9 million per year, around $1.5 million of which was exported.
Until 1996, the farmed rabbit industry viability was restricted by the relatively low cost and high
availability of wild rabbit for harvesting. In addition it was illegal to farm rabbits, for
example, rabbit farming only became legal in Western Australia in the late 1980s. Apart from
legality, some of the challenges facing rabbit farming were:
ƒ lack of capitalisation: rabbit farms generally require special sheds capable of keeping
rabbits
comfortable and secure, while appropriately dealing with ammonia from rabbit
excreta;
ƒ the labour intensiveness of rabbit farming; and
ƒ difficulty in selecting the right (low cost) feeding formula.
As a result, farmed rabbit could only compete with wild rabbit in niche markets where it
sold for around twice the price of wild rabbit.
Since the introduction of calici virus in 1996, the wild rabbit export and domestic industry has
suffered from uncertainty of supply. In 1998-99, only $440,000 worth of wild rabbit was sold
for human
consumption. This has opened up opportunities for farmed rabbit. It is now legal to farm rabbits
in all states except Queensland and Northern Territory, but in some states permits must be
issued. This
chapter draws on the survey results to estimate:
ƒ the current size of the market and expected
growth; ƒ the responsiveness of supply to price;
and
ƒ the responsiveness of demand to price.
Estimating industry supply
Size of rabbit farms
Survey results show a continuum in size with an average of almost 100 does
There are a total of 3006 does on the 31 farms responding to the survey, an average of 97 does
per farm. This average hides a considerable diversity of farms. For the analysis farms were
divided into large and small farms (small farms were classified as those with less than 40 does).
On this basis, there are 22 large farms with 2849 does at an average of 130 per farm. There are
9 smaller farms with an average of 17 does per farm. Chart 2.1 summarises the distribution of
farms by size.
17. Chart 2.1 Distribution of size of rabbit farms
7
Number of Does
6
5
4
3
2
1
0
0-19 20-39 40-59 60-79 80-99 100-200 200+
Data source: CIE estimates based on survey responses
Comparison with results from existing literature suggest a trend to larger farms
In 1998-99 over half of the farms surveyed had less than 50 breeding does, compared to the 2003
survey results where only 30 per cent of farms had less than 40 does. The average number of
does per farm was found to be 57 in 1998-99, and 97 in 2003. This is evidence of the
increasing economies of scale being employed by the industry.
Growth in farm size is expected to continue with an average size of 350 by 2008, with
smaller producers dropping out
Most farmers responding to the question on growth expect their farms to grow in size
between 2003 and 2008. Of the 81 per cent who responded to the question, 60 per cent
expected to have more than 100 does by 2005. By 2008, there were 3 producers who
expected to exceed 800 does, and only 11 others expecting to remain in the industry with a
minimum size of 65 does.
These numbers indicate that the process of consolidation and generating economies of
scale in the industry is already underway and is expected to accelerate in the future.
Industry size
Current size is estimated at around 157 tonnes per annum
A 1999 report for RIRDC by Foster estimated the size of rabbit meat production at 106 tonnes per
annum (dressed weight). This was produced from 115 rabbit farms with an average of 57 breeding
does. Assuming a 50 per cent conversion in live to slaughter weight and an average weight at
slaughter
of 2.4 kilograms (McInnes pers comm August 2003), this implies a market size of around 84
000
farmed rabbits. This implies a turn-off from does to animals for slaughter of around 14 rabbits
per doe
per year. This looks low considering the Crusader project estimates a turn-off of around 31.5 per
doe
per year. The survey reports a current market size of around 157 tonnes in 2003. The estimates
provided range from 110 tonnes to 250 tonnes. On the basis of the conversion estimates (above)
this
suggests a market of around 131,000 rabbits (range of 100,000 to 208,000). On the basis of an
average
number of does of around 100 per farm and the Crusader estimates of production per doe this
implies
only 42 farms would be required to have supplied this market. On the basis of the 1999 figures
18. there
would be around 97 farms. The actual number is likely to be somewhere between these numbers
so the
survey respondents could represent anywhere from 80 per cent to 30 per cent of the total
number of
farms. We think it is around the third mark and the survey responses on production suggest that
the
4
19. survey respondents supply around 40 per cent of the total supply. This suggests that the actual
average turn-off per doe is well below the Crusader 31.5 rabbits per doe. The survey results
suggest an average turn-off of around 24 rabbits per doe.
Growth at around 10 per cent a year is projected
Our estimates for market size in 2003 suggest that growth has averaged approximately 10 per
cent per annum over the period 1998-2003. Small and large farmers provided fairly consistent
estimates in the survey of the current and potential future size of the market for farmed rabbit.
All expect the market to expand in size.
Chart 2.2 shows two scenarios for growth in the rabbit industry, starting in 1999. The first reflects
Foster’s projected industry growth at 31 per cent per annum, based on an assumption that the
farmed rabbit industry would be an imperfect but reasonable substitute for the wild rabbit
industry. A growth rate of 31 per cent per annum growth was required to achieve his most likely
scenario of 692 tonnes of production in 2004-05. Based on this ‘most likely’ scenario the
industry would be producing around 400 tonnes dressed weight in 2003.
By our estimates the current market is around 160 tonnes, with growth well below the projected
growth rate. This is most likely the result of the high costs experienced by farmers particularly
those
associated with feed costs and the large financial investment required to set up an efficient large
scale
operation (see below). Currently the low rate of profit to rabbit farming may preclude an
investment of
such magnitude. The drought during 2002 and into 2003 has had a major impact on feed prices
and led
to many farmers leaving the industry. In Tamworth feed prices went from $350 to $550 and are
not
predicted to ease until this year’s cereal grains become available in late summer, that is,
February
2004.
The market is anticipated to grow from this point, with survey average projections of 305
tonnes by 2008 and 594 tonnes by 2015. This reflects relatively modest growth rates of 14
per cent to 2008 followed by 8 per cent to 2015.
Chart 2.2 Estimated size of Australia’s farmed rabbit industry
700
600
500
Foster CIE
400
300
200
100
0
1999 2001 2003 2005 2007 2009 2011 2013 2015
Data source: Foster (1999) estimates are based on their most likely scenario of 692 tonnes of
production by 2004-05, with a growth rate of 31 per cent per annum to achieve this. CIE
estimates are taken from the survey.
The source of expansion in the industry has been growth in farm size
Over 1999 to 2015 the estimated rise in market size is 460 per cent while increase in does per
20. farm is
estimated at 580 per cent. Expansion to date has taken place through the increases in average
farm size
5
21. with possible consolidation occurring, as opposed to more entrants entering the market. This
trend is expected to continue to 2008 and then slow.
Table 2.2 summarises the estimates of farm size, number of farms and production levels that
have been backed out of the survey data. The key unknown is the turn-off of rabbits per doe,
which, as discussed above, could range from 14 to -31.5. At the low end of the turn-off
estimates there will be little
change in the number of farms, while at the high end there will be considerably fewer farms.
The
reality is probably a small number of large and growing high turn-out farms and a large, but
declining, number of small relatively low turn-out farms.
Table 2.2 Estimates of farm numbers and farm size
Low turn-out High turn-out
scenario - 13.5 scenario - 31.5
Year Meat Rabbits Implied growth rabbits per doe rabbits per do
Tonnes Slaughtered % p.a No. of does Farms a Farms
1999 106 88333 57 115 115
2003 157 130556 10 97 100 42
2008 305 254167 14 158 119 53
2015 594 494643 8 387 95 41
b
a Assumes a turn-off of 13.5 rabbits per doe; b assumes a turn-off of 31.5 rabbits per doe
Source: CIE estimates
based on survey responses
The aggregate supply curve suggests that supply is highly elastic at current price levels
The survey asked farmers at what farm gate price they would drop out of the rabbit farming
industry, and what amount they would supply at different price levels. From this, we were able
to extrapolate a supply curve for the rabbit farming industry. The supply curve is fixed at low
wholesale prices with only a few suppliers supplying below $5/kg of meat (about $7 a rabbit
based on a weight of 2.4 kg). At $7/kg (about $9.40 a rabbit) there is considerable expansion in
supply and the supply is highly
responsive to prices until around $9/kg when supply becomes less elastic. Note that it is the
supply response of the large firms that dominate the industry as small farms have only a very
small impact on industry supply, producing only one per cent of rabbit meat.
Chart 2.3 Supply curve for the farmed rabbit industry
11
10
9 Survey
8
7
6
5
4
3
2
1
0
0 50 100 150 200 250
Tonnes
Data source: CIE estimates based on survey responses
The supply curve is fairly elastic for both small and large farmers. Small farmers tend to drop
out of the market at a higher price than large farmers do.
6
22. Prices for rabbits and meat
The project reports that rabbit is currently retailing for between $11 and $15/kg, with prices
up to
$17/kg in centres where supply is tight, that is Brisbane, and where the market can bear it,
that is,
north-shore suburbs of Sydney. In Victoria rabbit retails at the lower end of this range. The
project
reports that in 2001 they were being paid $2.50/kg live (about $7 per rabbit) and in 2003 are
being
paid $3.30/kg live about ($9.24 per rabbit). Macleay Valley rabbits who are processing about
25 per
cent of the New South Wales rabbits have increased prices from $5.00/kg dressed in 1999
(about
$7.30 per rabbit) to $6.50/kg dressed in 2003 (about $9.50 per rabbit). Processors in Victoria
report
similar increases in prices paid. The survey respondents demonstrated that farmers achieve a
range of prices depending partly on location. Their reported average prices were around
$2.96/kg live, which is roughly consistent with the reported wholesale price of $7.40/kg.
Chart 2.4 shows the relationship between the different prices and how the weight per rabbit
impacts on the prices quoted.
It should be noted that the benefit estimates are independent of price, so this uncertainty over the
actual price does not affect the result of the evaluations. Price is important, however, in
determining the profitability of rabbit farming, and hence the long-term future for the
industry.
Chart 2.4 Relationship between farm gate and wholesale prices
Enterprise model results
Farmgate estimate
Live weight Weight per
rabbit
X
3.40 $/kg
2.8 kg = $9.52
X
Conversion
50%
=
Carcass Transport and
weight
+ Wholesale
slaughter costs $/kg
6.80 $/kg
$2 / 1.4 kg $8.46
$.33 / 1.4 kg =
(Continued on next page)
24. Chart 2.4 Relationship between farm gate and wholesale prices (continued)
Farmgate
Foster (1999) estimate
Live weight Weight per
rabbit
X
3.28 $/kg
2.5 kg = $8.21
X
Conversion
50%
=
Carcass Transport and
weight
+ Wholesale
6.57 $/kg slaughter costs $/kg
$2 / 1.25 kg $8.43
$.33 / 1.25 kg =
Survey results Farmgate
estimate
Live weight Weight per
rabbit
X
2.96 $/kg
2.5 kg = $7.40
X
Conversion
50%
=
Carcass Transport and
weight
+ Wholesale
5.92 $/kg slaughter costs $/kg
meat
$2 / 1.25 kg = $7.78
$.33 / 1.25 kg
The value chain for rabbit production
Rabbit farming is a relatively capital and labour intensive industry. The cost of establishment
has been estimated at $240,000 to $300,000 for a 300 doe farm (Foster 1999). However, the
Crusader project
has found that this has not generally proved the case with farmers being able to establish
facilities,
even when built from scratch, at a much lower capital cost. For instance, the facility for rabbits
at
CSIRO which would accommodate 140 does as a commercial operation has required a capital
investment of approximately $60,000. Many farmers are starting with existing sheds and do not
have
the major capital expense of building construction. Therefore, profit after accounting for fixed
costs, is likely to be higher for more recent farmers entering the industry then the farmer on
which Foster based his income estimate. The Enterprise model assumes a capital cost of around
$26,000 for a 100 doe
farm (based on an 8 per cent cost of capital).
25. Using the Enterprise model capital costs are around 16 per cent and feed costs, which are
most of the
variable cost excluding labour, make up 69 per cent of the total cost of farm production
(excluding
labour). Off farm costs make up around 20 per cent of the wholesale price. Chart 2.5 shows an
example value chain for farmed rabbit. Based on a price of $3.40/kg live, which is around
$7.60/kg
8
26. wholesale the return to labour for a 100 doe farm supplying 2380 rabbits to market (a turn-off
24 per doe per year) would be under $2,000. If the Enterprise rate of 31.5 rabbits per doe is
achieved the return to labour is a little over $8,000 a year. These figures suggest that a
wholesale price higher than $8/kg required to make the industry attractive to new entrants.
Chart 2.5 Example value chain — values in $ per rabbit
Enterprise model
100%
Return to labour 25% "Profit" $2.97
90%
80%
Fixed costs 9%
70%
Other variable 6%
60%
50%
Feed cost 40% Farm gate price $9.52
40%
($3.40/kg live)
30%
20% Wholesale
Transport 3% price $11.85
10%
Slaughter cost 17% ($7.63/kg meat)
0%
Survey based model
100% Return to labour 3% "Profit" $0.38
90% Fixed costs 12%
80% Other variable 8%
70%
60%
50%
Feed cost 57% Farm gate price
40%
$9.52 ($3.40/kg
30% live)
20% Transport 3% Wholesale
10% price $11.85
Slaughter cost 17%
0% ($7.63/kg meat)
Data source: CIE estimates based on survey responses
Estimating industry demand
The closest substitute to rabbit meat is usually considered to be chicken meat, which has a fairly
elastic demand, that is, quantity demanded is strongly related to price (Foster 1999). However, a
recent study on rabbit marketing in Sydney (by Kurt and Tim Johnson University of Western
Sydney) that
found that rabbit was more comparable to veal and lamb, but unlike these two other meats,
regardless of level of supply the price for rabbits remained constant. The implication of this
finding is that
demand is highly price elastic. This does not fit the profile of rabbit as gourmet meat which
implies
that demand is less price sensitive. The reputation of wild rabbit was as a cheap meat, to the
degree
that farmed rabbit replaces wild rabbit at low prices, and becomes a gourmet meat at high prices
this
suggests demand is more price sensitive at lower rather than higher prices. This would give the
demand curve a convex to the origin shape.
28. A demand curve was constructed based on estimated price elasticities for farmed rabbit meat.
Foster (1999) estimated that rabbit meat has an own price elasticity of -0.8 at the then current
market levels. This implies a one per cent increase in price will result in a fall in demand of
0.8 per cent at current prices and volumes. Chart 2.6 shows the demand curve for several
elasticities of demand. Note that wholesale prices are used in the diagram.
Chart 2.6 Estimated demand curve
11 E=-.8 E=-1 E=-2
10
9
8
7
6
5
4
3
2
1
0
0 50 100 150 200 250 300 350 400 450 500 550 600 650 700
Quantity (tonnes )
Data source: CIE survey, 2003
Wholesale prices in 2003 appear to be roughly the same as in 1998 (average reported by Foster for
1998) while the industry output has grown by roughly 50 per cent. This would be observed if
demand for rabbit meat is perfectly elastic or close to it, or that demand has increased (a shift
of the demand curve), so that the equilibrium price has remained at $7.50. This shift of the
demand curve could have been driven by the substitution of farmed for wild rabbit.
Pricing outlook
Without exception the farmers surveyed who commented on anticipated price movements
believed that prices for rabbit meat would increase. Average expected price-increases for 2003-
05 were 10 per cent, 6 per cent for 2005-08 and 7 per cent for 2008-10. Wholesale prices are
expected to rise from an average of $7.40 in 2003 to $9.00 in 2005, $10.70 in 2008 and $12.20
by 2010.
To achieve these increases in price, given the expected increase in supply, demand must be
expected to increase over time. Chart 2.7 shows the expected rise in price and market size.
10
30. 3 Program performance
The overarching purpose of the R&D program was to maximise the profits of rabbit farmers. To
achieve this purpose, the project established a rabbit herd at CSIRO’s Pastoral Research
Laboratory at Armidale. The main research undertaken aimed to:
ƒ estimate genetic parameters for intensive measurement traits such as number of kittens
weaned per
litter, average daily liveweight gain and disease resistance;
ƒ use this information to design and validate a breeding program;
ƒ with commercial breeders, systematically quantify production parameters and develop
simple
software to manage data and formulate practical systems of performance recording and
rabbit
selection; and
ƒ disseminate results and technical updates through existing industry networks.
As part of the work, all aspects of animal husbandry had to be considered, and the technical advice
generated by the project included information on establishment and set-up costs. To the extent to
which this also improved the guidelines for practices the project went beyond the breeding
objectives. As the evaluation below demonstrates it is this aspect of the work that has proved
most beneficial to the industry to date.
The cost of the research program
The estimated cost of the Crusader program to 2002-03 is $392,269 in nominal dollars (table
3.1). This probably understates the actual cost of the program to the extent to which in-kind
contributions are not included. The main omission is the use of breeding software developed
prior to the program, which has been further developed by the program.
Table 3.1 Annual research costs for the Crusader project RIRDC budget
1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 TOTAL
$ $ $ $ $ $
RIRDC Funding 76,606 80,293 62,298 20,766 239,963
CSIRO Funding 47,004 38,641 39,561 0 125,206
Industry & Other
Funding 11,100 8000 8,00 0 27,100
TOTAL 134,710 126,934 109,859 20,766 392,269
Source: RIRDC database
Summary of program outputs
The breeding program
The rabbit breeding program focused on the three major farmed rabbit breeds in Australia,
the New Zealand White, Californian and Flemish Giant.
The breed evaluation showed that, for reproduction traits such as litter size, purebred New Zealand
does were just as good as crossbred does, indicating that the level of hybrid vigour being
expressed is
not large enough to warrant a structured cross-breeding program. It would be unwise to base a
breeding program on purebred Californian rabbits, and possibly Flemish Giant, because their
reproductive performance was poorer than New Zealand Whites. For growth traits, the New
Zealand
White and Flemish Giant purebreds performed the best, with similar results for the crosses of
these
two breeds. Purebred Californians grew the slowest and crosses with Californian were
intermediate.
32. ƒ develop a superior line of purebred New Zealand White rabbits; and
ƒ develop a synthetic or composite strain of rabbits by selecting the best individual
rabbits
irrespective of breed.
The decision was made to do the latter, so that selection intensity could be maximised for the
given population of animals (that is the very best rabbits, regardless of breed, could be used),
and so that genetic variation in the foundation population was maximised. In July 2001, the
Crusader breeding program commenced using the index defined below. Index ($/doe/year) =
(Number Weaned EBV x $33.71) + (Average Daily Gain EBV x $10.61)
Response to selection has been positive, with the trend in both phenotypic measurement and
estimated breeding values showing an improvement for the two traits in the breeding objective.
There has been about a 10 per cent increase in average daily growth rate and a 5 per cent
increase in number of kittens weaned. There also has been an accompanying improvement in
individual liveweight of rabbits at 10 weeks of age and in number of kittens born alive per
litter.
The trend in estimated breeding values indicates that improvements can be attributed in part to
genetic
gain but there has also been a corresponding improvement in rabbit management and
husbandry. In
addition, low producing animals that had to be retained as part of the breed comparison were
culled,
giving an immediate lift to current productivity levels (Eady 2002, Final Report to RIRDC).
There are two ways in which farmers can hope to achieve these gains - improving the genetics
of their
rabbits and by adopting husbandry and management improvements demonstrated by the project.
The
first way of improving the genetic merit of their rabbits is to purchase superior breeding stock
from the
program or an associated breeder. The second is by implementing their own breeding program
based
on concepts obtained through Crusader, this may or may not involve the use of the software
developed
by the program.
Sales of breeding stock
Sales of Crusader breeding stock commenced in 2001. By January 2003, sales exceeded 250
breeding rabbits. Crusader has hosted a number of field days and workshops across Australia,
where the
availability of Crusader breeding stock is made known to farmers. Breeding does have recently
been sold for around $40, and bucks for $50. In a recent field day (July 2003) all available
rabbits were quickly sold out (McInnes pers comm. August 2003).
The software
The Crusader program assisted Daniel Brown, of GROWTEC Rabbits, with producing a
computer program called Rabbit Central Version 2. RC-2 is a rabbit management and
performance-recording software designed to help rabbit farmers with farm management and
performance recording. It is
commercially available and sells at a starting price of $700-$800 for small producers and
increases in price as the enterprise size increases.
Animal husbandry
One of the aims of the program was to improve the overall productivity of the industry by
developing ‘best practice’ in management. These cover areas from establishment to operations.
33. To the extent to which industry members are already following best practice they tend not to
gain from this type of information, and may, in a price sensitive industry, lose as a result of
competitors
improving their productivity. Thus there can be some tension with this type of R&D project.
Under these circumstances the winners are the entrants to the industry who face greater
certainty and benefit from being able to ‘get it right’ the first time, and existing industry
participants who had not had the resources (time and/or skills) to experiment.
13
34. To the extent that the R&D creates new standards for best practice that improve productivity
there is a potential gain for all members of the industry. Existing members can also gain when
entry is deterred
due to better information on the costs, profitability and effort required. This helps the industry
avoid a boom and bust cycle often seen in ‘new’ animal industries. Developing ‘best practices’
is especially
important in the rabbit industry, as poor quality product would tarnish the entire industry’s
image, thus affecting all producers.
Animal husbandry advice and information provided by the Crusader project has in many
cases had substantial effects on production and is viewed as a vital component of the
Crusader project.
Estimating adoption and effectiveness
Survey results
Part 2 of the survey questionnaire inquires about the farmer’s knowledge of the Crusader
program, adoption rates and the effectiveness of the knowledge and/or breeding stock.
All farmers surveyed were aware of the existence of the Crusader project; however as contacts
for the survey were taken from the Crusader database of farmers this was not surprising.
The results from the survey show that small rabbit farms were more likely to adopt the
outputs of the Crusader program than large farms. They were also more likely to gain benefits
from the use of the
information.
Adoption of Crusader outputs
Of the 22 large farms surveyed, 17 sought information on the Crusader project. Seven out
of eight
small farmers sought some sort of information (one did not respond to this part of the
survey).
Of the respondents on large farms, approximately half sought information on animal husbandry,
breeding and disease control, 23 per cent sought information on establishment and startup costs.
However, less than half of all farmers indicated that they adopted the outputs of the Crusader
program by purchasing does, bucks, RC-2 or changing animal husbandry (see chart 3.1). Some
may have
changed breeding practices as a result of the information provided, but this was not captured
directly
in the survey.
Three quarters of small farmers were researching breeding and disease control, half sought
information on animal husbandry and establishment costs, and around two-thirds sought
startup advice. Seventy one per cent of small farmers who sought information adopted
some aspect of the Crusader program.
36. Chart 3.1 Share of survey respondents who sought information
80%
70%
Large farms Small farms
60%
50%
40%
30%
20%
10%
0%
Animal husbandry Breeding Disease control Establishment and
startup cost
Data source: CIE survey 2003
Effectiveness of program
The survey allowed the adoption of specific outputs of the program to be measured, but there
are less
tangible knowledge outputs the adoption of which is only revealed through the assessment
made by
the farmers on the impact of the program on their performance. This section traces through
adoption of specific outputs and their impact, and the less tangible overall impact on the key
performance
indicators for farmers. The main finding is that it has been the animal husbandry and general
management advice rather than the breeding products (breeding animal and software) that has
impacted on farm performance.
Performance of Crusader does and bucks
Those farmers who purchased Crusader does did not report any benefit in terms of increased
number of weaners, increased weight at slaughter or reduced health or feed costs. Of those
who purchased bucks, none of the large farmers reported any benefits. One small farmer who
purchased bucks found an increase in weaners of 20 per cent, and increase in weight at
slaughter of 50 per cent.
Performance of Rabbit Central 2 software
Only large farms reported purchasing RC-2 software. The value of selective breeding is greater
with a larger range of breeding stock. Also the investment is not insignificant in terms of the
cost of the
software and the time required to utilise it. Of the four farmers who had purchased the
software, only one found that it provided any sort of benefit.
Changes to animal husbandry
Changes to animal husbandry was the most adopted aspect of the Crusader program. Seven
large
farms and five small farms changed animal husbandry due to the Crusader program, with two
37. and
three respectively benefiting from the change. The largest benefits were felt by small farmers,
who
achieved benefits of up to 50 per cent in reduced health costs and a 32 per cent increase in
weight at
slaughter age. Large farmers who implemented husbandry changes reported increases in the
number of
weaners per litter ranging from 0 to 20 per cent and increases in weight at slaughter from 0 to
10 per
cent. Overall the animal husbandry component of Crusader has had the largest impact on
production.
15
38. Chart 3.2 Adoption of specific outputs and reported benefits from Crusader
(numbers of
farms)
10 Achieved benefits (small farms )
9 Adoption (small farms )
Achieved benefits (large farms )
8
Adoption (large farms )
7
6
5
4
3
2
1
0 Purchased Rabbit Changed animal
Purchased does Purchased bucks Central 2 softw are husbandry
Data source: CIE survey 2003
Table 3.2 summarises the effectiveness or direct outcomes of the R&D. Note that these are
different
from those gains achieved in the experimental farm. It is common for R&D outputs not to be
replicable in practice and the effectiveness to be lower. This is due to a range of factors,
including
constraints on other inputs, which are usually less constrained under experimental conditions.
What is
interesting here is that very little of the benefit seems to arise from the breeding stock, with the
greatest reported source of gains being in animal husbandry and for a few improving their own
breeding program.
Table 3.2 Effectiveness of outputs when adopted
Area of productivity Number farms Impact Impact for Overall Implied
gain reporting change reported adopters impact adoption rate
Weighted Weighted
Large Small Range % average % average % % production
Increased weaners 4 4 5-20 19 4 19
Weight at slaughter 2 3 10-50 17 1 6
Reduced health costs 1 1 550 24 1 3
Reduced feed costs 2 3 540 18 1 6
Source: CIE survey 2003
The estimated impacts of Crusader are increasing weaners per litter (although it is not clear
how much of this is due to decreasing mortality rates or larger litter sizes), increasing live-
weight gain and in a few cases a reduction in feed and health costs. The gains for the large
farmers were predominantly in increased weaners. The comments on the surveys suggest that
some farmers did not find that the
program provided them with new information, while for other farmers it did. Thus the results
suggest that the gains are largely more in improving average practices by raising awareness and
understanding of ‘better practices’ rather than introducing new technologies and methods.
Approach to estimation of the benefits
The benefits can all be transformed into a cost reduction per kilogram of rabbit produced, that
is, the
impact is estimated as a change in per unit cost of production. This takes into account changes
39. in the
total cost of production (which tended to rise slightly due to higher production levels) divided
by the
volume of production (which rose due to both more rabbits produced and higher average
weight at
16
40. slaughter). This approach enables efficiency costs to be evaluated on an industry level as
opposed to a farm or per doe level.
The approach taken for the estimates reported in this chapter was to use the industry projections of
size and apply the cost savings to this estimate. To the extent that this does not attribute to the
project the value added of the expansion in production the approach will underestimate the
benefits. However, there are several reasons why this approach was taken to avoid
overestimating the benefits.
ƒ The survey found that many members of the industry are struggling to gain a return on their
capital
investment due to the high cost of feed. As a result the additional value added is relatively
low. If a
per farm benefit based on a relatively profitable farm is simply ‘multiplied up’ this will
significantly overstate the benefits.
ƒ The ‘per farm’ or ‘per doe’ approach assumes that the farmer can sell all increased
production at
the going price. For a price taker, this is a reasonable assumption. But when selling into a
price
sensitive market, the increase in production implied tends to result in an, often significant,
fall in
prices.
The overall magnitude of cost reductions is estimated using the projections of industry size
from the survey. Using a cost savings approach to evaluating the benefits means that no
assumptions have to be made regarding the future price of rabbit meat. Allowing the price of
rabbit meat to vary will have a significant impact on profitability and hence on the likely
supply response, but not on the estimates of returns to the R&D investment.
Experimental impact scenario
The Crusader project estimated that the benefits flowing to farmers from adopting Crusader
were: ƒ a ten per cent increase in the average daily growth rate; and
ƒ a five per cent increase in the number of kittens weaned.
In estimating the impact of these shocks we assumed that the average farm is 100 does and
use the Enterprise model for costs of production and output estimates
(www.csiro.gov.au/crusader). The adoption profile used is the profile anticipated by the
program researcher. Adoption in 2003 was assumed to be very low at 5 per cent of the
industry, rising to 70 per cent by 2007.
Our evaluation of these estimated efficiency gains using a unit cost of production approach
give a net present value of $1.55 million at the five per cent discount rate with an internal rate
of return of 15.7 per cent. The net benefit investment ratio (NBIR) is reported as any costs of
implementation are
incorporated into the estimation of benefits. Thus this estimates the return on the research
investment given that farmers make any investment required to implement the R&D outputs.
Results of this
evaluation are detailed in table 3.3.
Table 3.3 Benefits for the Crusader farmed rabbit project using the best case scenario of
the
researcher’s estimates
Discount rate Project costs NPV NBIR IRR
$m $m %
0 per cent 0.36 4.12 15.7
11.4
5 per cent 0.34 1.55
4.6
10 per cent 0.32 0.68
2.1
41. Note: NPVs are in 2003 dollars calculated as at the
beginning of the project in 1999. Source: CIE
calculations, project estimates of shocks (Eady 2002).
17
42. The results are not very sensitive to the assumptions about industry size and growth rates. A low
production scenario with production 10 per cent lower than the base case results in a NBIR of
4.1 and an internal rate of return of 14.9 per cent. If the industry is 20 per cent larger than the
base case the NBIR is 5.5 and the internal rate of return is 17.3 per cent.
Impact of the Crusader program based on survey data
As discussed above, the shocks reported by the survey are different to those anticipated. The
adoption rate is based on the survey adoption rate, and an assumption that the survey
respondents reflect 40 per cent of production. It is assumed that other members of the industry
adopt the program outputs at the same rate as the survey respondents and achieve the same
changes in productivity, but with a lag of 2 years. The productivity benefits are assumed to be
sustained until 2029. The other difference is that
these changes are applied to an ‘average’ farm of 100 does. The cost structure for this farm is
basically the same as the Enterprise model, except that the turn-off per doe estimate used is 24
rather than 31.5. This better reflects the survey results and in the model is input as a lower
number of litters per year.
The results are the same if litter size were reduced.
Evaluation of the impact of the Crusader project based on the survey data gives similar results
to the ‘best case’ scenario, however the drivers of the gains are very different. A $1.25 million
NPV is
generated at the 5 per cent discount rate with an IRR of 14.5 per cent. As indicated by chart 3.2
most of the gains indicated in the analysis are being generated by animal husbandry advice and
improved disease control as opposed to improvements in breeding stock. Details of the benefits
flowing from the project as estimated by the survey responses are given in table 3.4.
Table 3.4 Results of the benefit cost analysis for the Crusader farmed rabbit project based
on
the survey responses
Discount rate Project costs NPV NBIR IRR
$m $m %
0 per cent 0.36 3.26 14.5
9.0
5 per cent 0.34 1.25
3.7
10 per cent 0.32 0.57
1.8
Note: NPVs based on 1999 as of 1999 (project start).
Source: CIE calculations, Survey responses.
As with the ‘best case’ scenario the results are fairly robust to changes in the industry size.
With the
low growth scenario for industry size the NBIR is 3.3 and the internal rate of return is 13.6 per
cent.
With the high growth industry scenario the NBIR is 4.5 and the internal rate of return is 16.2
per cent.
Conclusion
The results of the survey suggest that the returns to the first Crusader project have been solid
but not spectacular gains coming about through improving animal husbandry and general
practices in rabbit farming. Little of the gain can be attributed to the breeding component of
the program.
The breeding gains achieved in the program, if transferred to the industry, will provide additional
returns on the investment. To the extent to which additional R&D is required to achieve these
gains in practice is additional investment need to be taken into account. The results of this
BCA should be interpreted more as an ex-ante evaluation that implies an additional investment
of $340,000 that
achieves a 10 per cent increase in average daily growth rate and a 5 per cent increase in
number of kittens weaned with 70 per cent adoption will provide a return of around 16 per
cent.
44. 4 Implications for the future
Implications of an expansion in supply
Foster (1999) estimated that the farmed rabbit market would grow at a rate of 31 per cent per
year
from 1999 to 2005, but that prices will remain steady at around $7.50/kg. For this to occur,
demand
and supply must expand at roughly the same rate. The evidence on price is mixed (see chapter
2), but
suggests that prices may have fallen to 2001 and recovered, at a minimum, to the 1998 levels.
Growth in the industry appears to be significantly slower than projected (around 10 per cent a
year), and costs of production have risen in recent years due to feed prices, and for some
farmers dealing with the impact of the calici virus. Clearly offsetting this has been some
consolidation and growth in the average farm size, which brings scale economies. While input
price rises would shift the supply curve upwards (reduce supply at any given price) the
economies of scale shift the curve out (increase supply at any price). Given the market growth
and relatively constant prices both demand and supply curves have clearly been shifting out
over time.
Practically all the farmers surveyed expect prices for farmed rabbit meat to increase in the
future, even though they also expect production to increase. For this to occur, demand would
have to increase at a greater rate than supply. As discussed below there does not appear to be a
clear understanding of what forces would drive this outcome.
Concerns and challenges facing the industry Threats to
the industry
The survey asked farmers to rate their perception of threats to the rabbit farming industry.
Responses are shown in chart 4.1.
The highest perceived threat is feed price followed by regulation of the industry and the lack of
processing and slaughtering facilities. Eighty six per cent per cent considered feed prices to be
a high concern, 59 per cent considered regulation a high concern and 54 per cent considered
processing to be a high concern.
Myxomatosis, calici virus, other diseases and animal rights were also viewed as concerns.
However, 62 per cent of respondents consider foreign imports to be only a low concern,
indicative of the low probability of this happening.
19
45. Chart 4.1 Perceptions of threats to the industry
25 High Medium Low
20
15
10
5
0
Data source: CIE survey 2003
These results confirm views expressed earlier (Foster, 1999), who determined that drought
sensitivity, animal welfare, disease, pollution and associated regulation, and food safety and
quality were the major issues facing the industry.
Factors affecting demand
Foster (1999) cites the factors affecting demand for rabbit meat as the price of competing meats,
consumer tastes (of which perceived food safety is a determinant) and incomes. Our survey
expanded on these demand side concerns by asking what farmers regarded as the critical
factors driving present and future demand for rabbit meat.
Rabbit meat has had a reputation of being an inferior meat due to its position as a staple meat
during the Depression era. However it has the potential to become a ‘respectable’ meat for
health reasons. Rabbit is low in fat, high in protein and has a higher iron content than
chicken.
The most important factor affecting demand for rabbit meat cited by survey respondents was
the
ability of the industry to maintain a clean image, with 93 per cent of respondents citing this
as of
‘high’ importance. Other important factors seen to affect demand were promotion and
marketing of
rabbit meat, industry coordination and the decline in the availability of wild rabbits (see
chart 4.2).
The relative unimportance of wild rabbits and supermarkets suggests that the survey
respondents do
not see farmed rabbits as a substitute for wild nor that rabbit will become a ‘standard’ meat on
offer in
supermarkets. This suggests that the view of the future market is in specialty meat shops and
restaurants.
47. Chart 4.2 Factors affecting demand for farmed rabbits
30 High Medium Low
25
20
15
10
5
0
Demand wild Promotion + Clean profile Coordinating Supermarkets
decline marketing industry
Data source: CIE survey 2003
Implications for the future
Key points:
ƒ There are substantial potential gains to the profitability of the industry in bringing up the
industry
average performance to the turn-off rate per doe as achieved in the Enterprise model (that
is 31.5
rabbits per year).
ƒ The improvement in the industry performance will have a major impact on the ability of the
industry to supply meat rabbits, and this will have downward pressures on price unless
demand can be stimulated.
ƒ Demand growth must come in the ‘niche’ markets of restaurants and specialist shops while
there is
currently scope to stimulate demand in these areas, the volume at which market saturation is
reached is not known.
ƒ To date there is little evidence that the breeding side of the project is yielding observable
improvements in production on-farm. At this stage the gains are largely from improved
animal husbandry.
ƒ Increasing economies of scale could reduce the need for external breeding as stocks are large
enough to source own breeding stock. However scale may offer opportunities for more
specialist provision of breeding stock.
21
48. Survey of Rabbit Farmers
June 2003
Thank you for participating in this survey. This survey, undertaken on behalf of the Rural
Industries Research and Development Corporation (RIRDC) New Animals program, is an
essential part of the evaluation of the CSIRO Crusader project for the rabbit meat farming
industry. It is important for the Government to assess the performance of its programs to
support research and development (R&D) through evaluations of this kind. The survey aims
to assess the adoption of the R&D results, the
impact that this has had on the industry and the likely future growth of the industry.
Although we ask for specific figures, in many cases these may not be known with a high degree of
accuracy. Therefore, in most cases your best estimate is what we require. All information you
provide shall be treated as commercial-in-confidence and the report will only provide
estimates of the aggregate impact of the Crusader program.
The survey is expected to take approximately 30 minutes to complete.
Please return this survey by COB Friday, 25 July 2003, although earlier receipt would be appreciated.
To The CIE
By email: jgordon@thecie.com.au
By fax: 02 6247 7484
If you have any questions about the survey please
contact: Jenny Gordon or Dave Garrett on 02 6248
6699
If you are willing to discuss your answers please provide your name and contact details
below. Name:
Contact details:
22
49. Part 1 About your business enterprise
We need to understand a little bit about your business in general and its involvement with the Crusader
program.
1.1 What is your involvement with the rabbit farming industry? CurrentlyExploring options for
Producing involvement
ƒ Specialised rabbit farm
ƒ Producing rabbits as part of a broader
farm enterprise ƒ Producing rabbits as a
part time occupation (for profit) ƒ Hobby
farm (not for profit)
ƒ Research
1.2 If you are involved in multiple %
farming activities, what percentage
of your farm income is generated
from rabbit farming?
Current 2005 2008
1.3 How many does do you currently/plan to have?
1.4 Are you aware of CSIRO’s Meat Rabbit Project Yes Please complete NoPlease go to
(Crusader) Part 2 Part 3
Please go to part 2
23
50. Part 2 Impact of the CSIRO Crusader program
We need to understand the adoption of the R&D findings and effectiveness of the R&D in the field.
2.1 How did you hear about the CSIRO Field-days
Crusader project? (please indicate all
relevant answers) News letters
Internet
Sought out
information Other
farmers
Other (please specify)
2.2 What information did you seek/ find out
Animal husbandry
from the Crusader project? Breeding advice
Establishment costs
Startup advice
Disease control
Other (please specify)
Purchased Crusader does
2.3 Have you changed any practices as Purchased Crusader
a
result of the information and/or bucks
services provided by the Crusader Purchased and/or
project? (please indicate all relevant used the Rabbit
answers) Central 2 software
package
Changed animal
husbandry
Other changes (please
specify)
Increased weaners per doe %
2.4 What effect have these changes Increased weight at slaughter age %
made to
the profitability of your rabbit Reduced health costs per doe %
farming enterprise? Reduced feed costs per doe %
Other (please specify)
Please go to part 3
Part 3 Performance
The Crusader program has targeted three variables (number weaned, growth rate, disease
resistance)
which can be improved through genetic breeding and improved animal husbandry. Breeding
52. growth productivity are key variables to the success of rabbit farming. The following questions
aim to
evaluate the productivity levels you have achieved and your anticipated improvements in these
areas.
If actual data is not available, please give your best estimate.
3.1
Please give your best estimate of
your average performance. Source of improvements
Past Present
Anticipated
Performanc performance improvements Breeding % Animal husbandry %
e
2000 2003 2008
Litter size % %
per doe (#)
Litter size at
weaning
(mortality % %
rate) (#)
Time to
weaning % %
(weeks)
Weight at
weaning % %
(kg)
Age at
slaughter % %
(weeks)
Slaughter % %
weight (kg)
Please go to part 4
54. Part 4 Industry Prospects
In order to evaluate the benefits of R&D it is necessary to estimate the industry’s potential for growth,
limiting factors, and possible threats. The following questions ask for your assessment of the future of
Australia’s rabbit meat farming industry.
4.1 What do you think the average size of
Estimate Average does per farm Total Production
meat
farm will be in the future and the total
size of the market? 1999 does tonnes
2003 does tonnes
2008 does tonnes
2015 does tonnes
Foreign imports of rabbit meat High Medium Low
4.2 What threats to the
future of Australia’s
Feed price sensitivity (drought) High Medium Low
rabbit farming
industry are you
concerned about? Myxomatosis and Calici virus High MediumLow
Other diseases High Medium Low
Animal welfare rights High Medium Low
Access to slaughtering and High Medium Low
processing facilities
Over-regulation by councils High Medium Low
Other (please specify)
4.3 How important are
Demand driven by decline of the High Medium Low
wild rabbit industry
the following factors
for the development Promotion and marketing High Medium Low
of markets for the
Australia rabbit Maintaining a clean profile of High Medium Low
farming industry? rabbit meat and the industry
The development of a National High Medium Low
Association capable of
coordinating industry R&D and
lobbying for decreased regulations
The potential to distribute produce High Medium Low
via supermarkets
Other (please specify)
26
55. 4.4 One objective of the program is to develop a National Breeding Program that could include
breeders from
all regions in Australia who will undertake a linked genetic evaluation and provided rabbits
with objective
measurements for the industry as a whole. To the best of your knowledge, what share of the
industry would
source their rabbits from breeders involved in such a program? Please give your best
estimate.
Now 2005 2008
Small farmers(<50 does)? % % %
Medium sized farmers (50-200 does)? % % %
Large farmers (>200 does)? % % %
Please go to part 5
27
56. Part 5 Price effects
As in any industry price plays a critical role in determining the level of production and
ultimately the size of the industry. The following questions are designed to gauge the level of
price sensitivity for the demand and the supply of rabbit meat.
2003 2005 2008 2010
5.1 What price do you think you will get
for rabbit meat in the following years
$/kg $/kg $/kg $/kg
($/kg)?
5.2 At current production costs what price
would you cease producing rabbits? $/kg
5.3 How much would you increase
$7 per kg $8 per kg $9 per kg $10 per kg
production at each of the following
prices?
% % % %
Other comments
Please use the space below to provide any other comments on the program or the industry in
general.
Thank you for your participation. The results will be compiled and presented in the report to
RIRDC on the returns to the R&D program.
All individual responses will remain confidential.
28
57. Bibliography
Bobbitt, J. 2003, Buffalo, Camel, Crocodile, Emu, Kangaroo, Ostrich and Rabbit Meat - New
value
added products, RIRDC Publication No. 03/036, RIRDC Project No. DAV-182A,
RIRDC,
Canberra.
CSIRO 2001, Farmed Rabbits for Growth in Australian Agriculture, RIRDC Research Project
CSU-
1A, Annual Report, 10 December 2001.
Davidson, B.R., Martin, B.R. and Mauldon, R.G. 1967, ‘The Application of Experimental
Research to
Farm Production’, reprinted from Journal of Farm Economics, Vol. 49, No. 4, November
1967.
Eady, S. J. and Prayaga, K. C. 2000, ‘Rabbit Farming for Meat Production in Australia:
Preliminary
Estimates of Economic Values for Production Traits’, Pastoral Research Laboratory,
CSIRO
Animal Production, Armidale, NSW, 23rd Conference of the Australian Society Animal
Production, Sydney, July 2000.
Eady, S.J. 2002, Final Report to RIRDC.
Foster, M., 1999, Australian Farmed Rabbit - Prospects for Industry Development,
RIRDC
Publication No. 99/98, RIRDC Project No. ABA-7A, RIRDC, Canberra.
http://www.csiro.gov.au/crusader Crusader Meat Rabbit Project, accessed 22 July 2003.
http://www.growtec.com.au/ Growtec - Commercial Rabbit Farming in Australia, accessed 4 July
2003.
Mo’ane, C. and Carota, M. 2003, ‘The farmed rabbit industry in Australia - a
commercial
perspective’, discussion paper prepared by Australian Rabbit Farm Pty Ltd, July
2003.
Wondu Holdings 2001, Benchmarks for New Animal Products - Alpaca, Buffalo and Rabbit
Production and Duck Processing, RIRDC Publication No. 01/113, RIRDC Project No.
WHP-2A, RIRDC, Canberra.
