This document summarizes a conference presentation on measuring competitiveness of beef and sheep production globally and at the farm level. It defines competitiveness and outlines different levels and factors that influence competitiveness. The agri benchmark network is described as a non-profit expert network that measures typical farms in major beef and sheep producing countries to analyze competitiveness based on factors like productivity, costs of production, and profitability. Selected results are shown comparing productivity, costs and margins for beef finishing farms globally. The presentation concludes that agri benchmark offers a framework for comparable analysis of competitiveness at the farm and sector level globally.
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Measuring competitiveness of beef and sheep production on national and international level
1. Bahta / Deblitz Policies for competitive
smallholder production
Gaborone
March 2015
Measuring competitiveness of beef and sheep
production on national and international level
Conference on Policiesfor Competitive Smallholder Livestock Production
Gaborone, Botswana, 4-6 March 2015
Claus Deblitz (Thünen Institute of Farm Economics) and Sirak Bahta (ILRI)
2. Bahta / Deblitz
Contents
Definitions and relevance for farm analysis
The network at a glance
Method and data
Selected results
March 2015 agri benchmark Beef and Sheep
Page 2
4. Bahta / Deblitz
Definition of competitiveness
March 2015 agri benchmark Beef and Sheep
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„Competitiveness is the sustained ability of a firm, a company or a
sector, to obtain and maintain market shares in regional, national and
international markets under liberalised market conditions.“
Own translation based on Zeddies et al. (1999)
5. Bahta / Deblitz
Levels of competitiveness
March 2015 agri benchmark Beef and Sheep
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Competitiveness
Sectoral level Intrasectoral Intersectoral
Observation level Product / Production system
Farm-level
―
Supply chain
―
Farm-level
Household
Supply chain
Spatial level Interregional, International
Content level Productivity, economic, environment, animal welfare, social
Reference unit Land Output
(return to land) (Product)
Labour
(Wages and returns to labour)
Temporal dimension Short-, medium-, long-term
Source: Own illustration based on Brandes (1991) and Schmitt (1991)
6. Bahta / Deblitz
How to measure and address competitiveness
March 2015 agri benchmark Beef and Sheep
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• Market shares
High or growing market share = high competitiveness
A first indicator and required to describe the framework
Can be distorted by market and policy regulation
Reasons for differences typically missing
• Farm level analysis
Competitiveness starts at farm level
Millions of producers decide every day to continue, stop or change
Measures of competitiveness are
productivity, cost of production, profitability
Without knowledge of production systems analysis is difficult
Understanding agriculture worldwide is the motto of agri benchmark
8. Bahta / Deblitz
agri benchmark Beef and Sheep: an expert network
March 2015 agri benchmark Beef and Sheep
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9. Bahta / Deblitz
Target groups and relevance
March 2015 agri benchmark Beef and Sheep
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• Address global challenges with global overview and systematic expertise
locally
Non-profit organisations
• Align future production through benchmarking and positioning
Producers and their organisations
• Operate successfully through in-depth understanding of markets and
customers
(Agri)Businesses
10. Bahta / Deblitz
Countries in the agri benchmark Network 2015
March 2015
Page 10
Measuring competitiveness
Countries with beef and sheep farm data
Countries with beef data only
Countries with sheep data only
2014 Countries Farms
Cow-calf 25 58
Beef finishing 31 76
Sheep 16 35
11. Bahta / Deblitz
Partners and supporters
March 2015
Page 11
Main supporter
Institutional
partners
Measuring competitiveness
13. Bahta / Deblitz
Typical farms – the principle
March 2015
Page 13
Measuring competitiveness
Imagine you have a guest from a foreign country who is interested
to see how beef farming is done in your country.
You would want to show your guest a farm that is
• … located in an important beef producing region,
• … using the common technology for beef production,
• … running the prevailing production system,
• … having a not too small and not too big size,
• … using the prevailing combination of labour, land and capital.
In other words, you want to show your guest a typical farm!
14. Bahta / Deblitz
Typical farms – reasons to choose the concept
March 2015
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Measuring competitiveness
… results can be generalised (contrary to individual farm data)
… data sets reflect quantities (production systems data) and not just
moentary figures
… data sets are consistent and reflecting reality of production systems
(contrary to surveys and averages)
… it uses a feedback and vailidation loop with producers and advisors
… it has proven to be applicable on a global scale and in countries
without or limited statistics and accounting data
… it is cost-effective
15. Bahta / Deblitz
3. Expertise of researchers + advisors + producers
> production system knowledge
> explore adjustments to changes in frame work
conditions (forward looking results)
1. Statistics available to determine
> important regions (‘hot spots’)
> farm sizes and distribution
According to farm size
Large sized farm
Basis: All farms in a region
%
Farm size
Moderate
sized farm
% of farms % of production
2. Focus groups of producers and advisors to
> define prevailing production systems
> collect data in a standardised way
> validate results
Typical farms – three sources of data
March 2015
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Measuring competitiveness
16. Bahta / Deblitz
Typical farms – how to include smallholders
March 2015
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Measuring competitiveness
Productivity and performance indicators in small herds are difficult to
measure (for example mortality, calving percentages).
Approach: use the data of a whole village to estimate productivity and
performance data
Include off-farm and household income where necessary
Estimate/allocate common grazing land to particular herders
Identify driving forces and incentives that go beyond enterprise and
production system analysis
20. Bahta / Deblitz
Production systems of beef finishing
Feed % in
> 30%
> 30%
> 50% grains
> 30%
dry matter
pasture
silage and
and other
freshly cut grass
other forages
energy feed
& other vegetation
Management/
Outdoor
Closed or semi-
Confined, large,
Mix of pens and
Housing
year round or
open barns with
open pens,
grazing of paths
part of the year
slatted floors
partially with
and paddies
and/or straw bedding
sun-covers
Extent of
Low
Medium
High
Low
purchase feed
Pasture
Silage
Feedlot
Cut & Carry
Measuring competitivenessMarch 2015
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21. Bahta / Deblitz
Daily weight gain and net gain by production system
(net gain = carcass weight divided by age at slaughter)
March 2015
Page 21
g per day
0
200
400
600
800
1000
1200
1400
1600
1800
2000
ID-4
ID-2
CN-940
CN-2000
AR-630
ES-430
MX-1500
ES-520
ES-5500
AR-26K
US-7200
PE-1700
CA-28K
ZA-75K
BW-2000
US-75K
ZA-3000
NA-25K
BR-680
AU-15K
UY-75
NA-600
BR-400
AU-320
BR-360
AU-150
BR-60
AU-375
AU-415
CO-350
BR-800
CO-130
BR-1750
CO-160
ID-100
AR-380
AR-800
AU-85
IE-40
UK-80
NZ-375
AU-540
UA-275
KZ-800
UK-45
UK-90
PL-30
CZ-500
PL-20
UK-750
DE-285
UA-5600
SE-230
CO-800
DE-800
RU-640
DE-280
CN-300
CN-150
FR-70
MA-280
DE-260
DE-525T
AT-35
AT-25F
AT-120
TN-45
CN-70
FR-200
AT-175T
IT-910
SE-100
IT-2660T
FR-60
SE-150
Daily weight gain (g per day)
Net gain (g per day)
Pasture
Feedlot
Silage
Cut&Carry
Measuring competitiveness
23. Bahta / Deblitz
0
100
200
300
400
500
600
700
800
900
'05 '06 '07 '08 '09 '10 '11 '12 '13
South Africa
Australia
Austria
Spain
Germany
UK
Italy
France
Cost developments of selected farms and countries
2005-2013 (USD and %)
USD per 100 kg carcass weight
'05 '06 '07 '08 '09 '10 '11 '12 '13
USA
Argentina
Poland
Argentina
Brazil
China
110 %
130 %
150 %
290 %
Measuring competitivenessMarch 2015
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Botswana cost development similar to ZA?
24. Bahta / Deblitz
Most finishing farms are profitable on whole-farm
level – other enterprise and direct payments reflected
Percentage of costs in total returns
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
AT-25FAT-35
AT-120
AT-175T
DE-260
DE-280
DE-285
DE-525TDE-800
FR-60
FR-70FR-200
ES-430
ES-520ES-5500
IT-910
IT-2660T
UK-45UK-80
UK-90UK-750
IE-40
SE-100
SE-150SE-230
PL-20
PL-30
CZ-500
UA-275UA-5600
RU-640
CA-28K
US-7200
US-75K
MX-1.5K
AR-380
AR-630AR-800
AR-26K
UY-75
BR-60BR-360
BR-400
BR-680
BR-800BR-1750
CO-130
CO-160CO-350
CO-800
PE-1700
CN-70
CN-300
CN-940CN-2000
CN-150
ID-2ID-4
ID-100
KZ-800
AU-85AU-150
AU-320AU-375
AU-415AU-540
AU-15K
NZ-375
MA-280
TN-45
ZA-3000ZA-75K
NA-600
NA-25K
BW-2K
% of opportunity cost in returns
% of cash costs + depreciation in returns
Europe
Asia,
OceaniaAmericas
Africa
Measuring competitivenessMarch 2015
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25. Bahta / Deblitz
-200
0
200
400
600
800
1000
1200
DE-
280
FR-70 PL-30 US-
7200
AR-
26K
CN-
940
ZA-
75K
AR-
800
BR-
800
CO-
350
Returns
Margin
Animal purchase
Feed costs
Land costs
Feedlot
Main drivers of costs and margins 2005-2013
USD per 100 kg carcass weight
Pasture
Silage
Measuring competitivenessMarch 2015
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26. Bahta / Deblitz
Conclusions
Measuring competitivenessMarch 2015
Page 26
agri benchmark offers a framework to measure and assess
methods for comparable farm (and sector) analysis which have proven
successful for more than 15 years on a global level
tools for in depth analysis of data
a platform for the exchange of experts and their knowledge
agri benchmark can make a contribution to informed decision making
policy analysis (what if?) policy makers
farm development and strategy producers and their organisations
monitoring projects and programmes aid / funding organisations
27. Bahta / Deblitz
For further information
Measuring competitivenessMarch 2015
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understanding
agriculture worldwide
Claus Deblitz
Thünen Institute of Farm Economics
Bundesallee 50, 38116 Braunschweig
Germany
Tel.: +49-531-596-5141
Fax: +49-531-596-5199
E-mail: claus.deblitz@ti.bund.de
Internet: www.agribenchmark.org
www.ti.bund.de/bw
Sirak Bahta
International Livestock Research Institute
Private bag, 0033,
Gaborone, Botswana
Tel.: +267-77586169
Fax: +267-xx
E-mail: S.Bahta@cgiar.org
Internet: www.ilri.org
Better lives through livestock!!