Current Situation and Development in the Small Ruminant (Goat) Industry Supply Chain

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Copyright © 2007 Esplana, Elmer, Lary Nel Abao, Roland Vasquez Current Situation and Development in the Small Ruminant (Goat) Industry Supply Chain Prepared by: Elmer R. Esplana National Secretariat Coordinator, National Task Force on Price and Volume Watch, Bureau of Animal Industry, Department of Agriculture, Quezon City Prepared for: The participants of the Goat Raising Agribusiness Seminar, 79 th Foundation Anniversary, Bureau of Animal Industry February 25, 2009

description

Presentation presented by Mr. Elmer R. Esplana, an economist and interdisciplinary researcher currently working as a government agriculturist at the Marketing Development Division, Bureau of Animal Industry. This presentation was an offshoot the earlier study conducted by the author and his fellow researchers in the Bureau of Animal Industry entitled "Development in the Supply Chain of the Philippine Goat Industry: An Assessment" which won a Grand Prize Award at the National Research Symposium in 2007, a yearly, national research contest, being organized by the DA-Bureau of Agricultural Research. This presentation was presented at the participants of the Goat Raising Agribusiness Seminar during the 79th Foundation Anniversary of the Bureau of Animal Industry in February 25, 2009 .

Transcript of Current Situation and Development in the Small Ruminant (Goat) Industry Supply Chain

Page 1: Current Situation and Development in the Small Ruminant (Goat) Industry Supply Chain

Copyright © 2007 Esplana, Elmer, Lary Nel Abao, Roland Vasquez

Current Situation and

Development in the

Small Ruminant (Goat)

Industry Supply Chain

Prepared by:

Elmer R. Esplana

National Secretariat Coordinator, National Task Force on Price and Volume Watch, Bureau of Animal Industry, Department of Agriculture,

Quezon City

Prepared for:

The participants of the Goat Raising Agribusiness Seminar,

79th Foundation Anniversary, Bureau of Animal Industry

February 25, 2009

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Outline of Presentation

1. Supply Chain and Supply Chain Management and

Current Situation of the Philippine Small Ruminant

(Goat) Industry

2. Example of Supply-Value Chain of Goat from

Pangasinan to Manila

3. Price Competitiveness of Chevon with US, Canada

and Australia

4. Conclusion and Recommendations

2

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Supply Chain and Supply Chain

Management and Current Situation of

the Philippine Small Ruminant (Goat)

Industry

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Introduction

• Supply chain as applied to the goat industry is a new concept in the Philippines. The application of supply chain in the goat industry was popularized in the Philippines by the team of researchers from the Bureau of Animal Industry when the research entitled “Development in the Supply Chain in the Philippine Goat Industry: An Assessment “ won the Grand Prize Award in Socio-economics Research at the agriculture national research contest or the National Research Symposium, Bureau of Agricultural Research, Department of Agriculture in October 2007.

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Supply chain is the core business process in

any organization that creates and delivers a

product or service, from concept through

development and manufacturing or

conversion, and into a market for

consumption.

It is called as the “seed to shelf” or “breed to

plate” or “farm to fork” approach.

Introduction

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Supply Chain Framework

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•According to Price Water Coopers

“Nowadays, it is supply chains

that compete in supply chains.”

Supply chain is driven by

consumers demand.

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• Supply Chain Management (SCM) involves

the flows between and among stages in a

supply chain to maximize total profitability –

Chopra and Meindl, 2001.

• SCM coordinates and integrates supply chain

activities to deliver customer value – Tony

Hines, 2004.

• As a management concept, SCM integrates

the management of supply chain process –

Jerry Rosenberg, 2004.

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• The different goals of SCM include: 1) to cut costs, 2) to increase

profits, 3) to improve performance in relationships with

customers and suppliers and 4) to develop value-added services

that gives a company/firm the competitive edge.

• For an industry focus (e.g. goat industry, hog industry, chicken

industry, etc), supply chain management covers an integrated

behavior, mutual sharing of information, mutual sharing of risks

and rewards, cooperation, same goal and same focus on serving

and satisfying customers, integration of processes and partners,

to build and maintain long-term relationships.

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Objectives

1) To provide an overview of the goat supply chain in the Philippines

from input supply, production, processing, marketing and

consumption;

2) To provide an overview of the supply chain management and how

it could be applied to the goat agribusiness in the individual

firm/farm level in the Philippines.

3) To identify the best practices along the supply chain;

4) To analyze profitability and competitiveness of chevon vis-à-vis

Australia, Canada, and U.S.A.;

5) To identify the inefficiencies, gaps and problems encountered by

the industry along the supply chain; and

6) To identify strategic directions/recommendation for the DA, BAI,

Local Government Unit and the goat industry stakeholders.

The objectives of this presentation include:

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Table 1. GOAT: Inventory by Farm Type,

Philippines, January 1, 2003-2007 (in heads)

Farm Type 2003 2004 2005 2006 2007

(Jan. 1) (Jan. 1) (Jan. 1) (Jan. 1) (Jan. 1)

Backyard 3,255,189 3,340,670 3,514,371 3,708,014 4,007,004

Commercial 15,252 16,954 20,824 26,171 30,570

Total 3,270,441 3,357,624 3,535,195 3,734,185 4,037,574

Source: BAS

Input Supply

• Goat inventory is increasing by six percent per year (BAS).

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Figure 2. Goat Inventory in Top Producing Regions, 2007

15%

13%

13%

9%

8%

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Input Supply

• Improved genetics as a result of imported breeds mostly from Australia

• The Federation of Goat & Sheep Producers &

Associations of the Philippines, Inc. (FGASPAPI) has been helping the industry since 2001. It assists in improving the genetic and breeding practices of the goat players by regularly conducting national congresses and trainings to support their members. The Bureau of Animal Industry and Livestock Development Council and other institutions are supporting the goat industry in these activities.

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Table 2. Importation of Breeder Goats,

2002 to 2006 (No.)

Origin 2002 2003 2004 2005 2006 Total

Australia 0 223 467 1304 865 2859

New Zealand 0 0 0 4 0 4

USA 126 82 23 22 50 303

Total 126 305 490 1330 915 3166

Source of Basic Data:BAI-NVQSThere was 2,027 heads of breeder goats importation in 2007. Total breeder goats importation increased by 68 percent from 2003 to 2007. 90% of imports came from

Australia.

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• According to a major goat breeder

interviewed (Neo Abalos, FGASPAPI

Secretary), he almost perfected his pure

breeding, crossbreeding, and upgrading

operations to meet clients’ weight

specifications.

• The goat industry is a beneficiary of the

development in other livestock

commodities, including production and

processing technologies.

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Neo Abalos Goat Farm in Pangasinan

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Neo Abalos Goat Farm in Pangasinan

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Goat Farmers Organization

•Major key players have organized

themselves into a national federation

(FGASPAPI) to have a stronger voice

in the livestock industry.

• Mr. Ben Rara is the current President of the

Federation.

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Current membership of FGASPAPI are: 1. Goat and Sheep Producers of Tarlac (GASPAT) - President: Jeff Lim

2. Region 4 Small Ruminants Raisers Association (R4SRRA) - President: Elmer

Rivera

3. Misamis Oriental Goat and Sheep Raisers Association (MOGSRA) - President:

Benjamin Uy

4. Zamboanga Peninsula Small Ruminant Council - President: Art Grino

5. Cebu Goat and Sheep Raisers Association - President: Luis Sanchez

6. Eastern Visayas Small Ruminants Raisers Association (EVSRRA) –

President: Lito Rodriguez

7. Masbate Small Ruminants Organization (MASRO) - President: Jose Ataat

8. Socsksargen Goat and Sheep Raisers Cooperative - President: Gauvain

Benzonan

9. Philippine Boer Breeders Association (PBBA) - President: Sixto Villaluz

10. Goat Industries Development Council (GIDC) - President: Darwin Tinasas

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Current membership of FGASPAPI are: 11. Goat Gadgets Inc. - President: Neo Abalos

12. Bukidnon Goat and Sheep Raisers Association (BUGSRA) - President: Don Mulligan

13. Palawan Goats Raisers Association - President: Mike Decena

14. Pangasinan Goat and Sheep Raisers Association (PAGSRA) - President: Ed

Paningbatan

15. Cagayan Small Ruminants Raisers Association, MPC - President: Josue Balderama

16. Northland Goat Producers Cooperative - President: Dr. Rudolfo De Guzaman

17. Nueva Viscaya Sheep and Goat Raisers Association - President: Stanley Maranon

18. Association of Sheep and Goat Raisers in Isabela (ASGRI) - President: Mon Valle

19. United Bulacan Goat and Sheep Raisers Association - President: Nards Cuevas

20. United Small Ruminants Raisers Association (USRRA) - President: Dave Villacarlos

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Production

• Goat Production Performance: Second to the

most stable positive growth from 2001 to

2006, although very minimal.

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Table 4. Livestock Volume of Production

(1995-1998) (1999-2002) (2003-2006)

Average GR Average GR Average GR

Total Volume of Production 5.35 3.37 1.41 2,241.18 2,296.74 2.48

carabao (1.18) 3.36 (0.78) 133.52 130.41 -2.33

cattle 8.77 (1.53) (2.77) 246.75 238.27 -3.44

hog 5.74 4.38 2.18 1,771.28 1,840.37 3.90

goat 0.91 0.28 0.71 77.29 74.82 -3.20

dairy (9.28) 3.95 4.76 12.34 12.87 4.29

Volume of Production 2005 2006 % Change

Table 4. Comparison of Livestock Volume of Production (In Thousand Tons), And Growth Rates from 1995 to 2006

Source of Basic Data: BAS Average GR- Growth rate per year

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Table 5. Volume of Goat Production, by

Quarter,

Philippines, 2004 - 2006

Source: BAS

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Commodity GR (98-07) GR (98-02) GR (03-07)

Livestock 2.48 3.49 1.69

Carabao 1.86 3.74 0.11

Cattle (1.42) (0.36) (2.50)

Hog 3.23 4.27 2.42

Goat 0.47 0.87 0.78

Dairy 3.86 4.51 4.30

Poultry 3.44 5.75 0.79

Chicken 3.49 6.78 0.20

Duck (1.66) 1.52 (6.18)

Chicken eggs 4.98 3.54 5.17

Duck eggs (0.80) 0.44 (3.95)

Table 6. Average yearly growth rate of livestock and poultry production from 1998-2007

Source of Basic Data: BAS

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Volume of Production 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 GR (98-07)

Goat Industry 71.95 73.9 75.19 74.6 74.79 73.58 74.98 77.28 74.82 76.56 0.47

Table 7. Goat industry Volume of Production and Average Growth Rate per Year, 1998 to 2007 (In Thousand Tons)

Source of Basic Data: BAS

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Livestock Value of Production

(1995-1998) (1999-2002) (2003-2006)

Average GR Average GR Average GR

Total Value of Production 5.67 3.35 1.39 39,384.58 40,396.74 2.57

carabao (1.20) 3.36 (0.81) 1,611.59 1,574.05 -2.33

cattle 8.75 (1.53) (2.76) 4,804.22 4,639.12 -3.44

hog 5.74 4.38 2.16 31,900.75 33,145.06 3.90

goat 0.92 0.26 0.62 1,006.32 974.16 -3.20

dairy (9.32) 3.95 4.76 61.70 64.35 4.29

Value of Production 2005 2006 % Change

Table 8. Comparison of Livestock Value of Production (In Constant Prices), And Growth Rates/or P million from 1995 to 2006

Source of Basic Data: BAS Average GR- Growth rate per year

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Goat Value of Production 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 GR (98-07)

Value of Production (at constant prices) 943.98 968.83 984.99 977.26 979.75 965.70 976.24 1,004.77 972.66 995.15 0.35

Value of Production (at current prices) 2,935.56 3,324.76 3,321.14 4,034.37 4,182.60 4,441.61 4,986.92 5,090.32 5,220.94 5,364.62 7.16

Table 9. Goat Industry Value of Production and Average Growth Per Year from 1998 to 2007 (In P Billion)

Source of Basic Data: BAS

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Production

Breeder Raised

• Different goat breeds (e.g. purebreed,

upgraded) are raised in government and

selected private sector farms nationwide.

• The most prevalent breed in these farms is

Boer.

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Table 10. Goat Breeds Raised in Selected

Private Farms in Provinces/Cities No. of

Farm PbB PbAn BxAn UpB UpAn UpS PbS xAl xTo N xS

NCR QC 1 x x x

I Pangasinan 2 x x x x x

II Isabela 1 x x

III Tarlac 12 x x x x x x

Nueva Ecija 2 x x x x x x

Bulacan 1 x x x x x

Pampanga 2 x x x x x

IV Rizal 1 x x x x x x

Batangas 1 x x x x x

Quezon 1 x x x x x

VI Bacolod City 1 x

VIII Ormoc City 3 x x x x

Mandaue City* 1

Leyte 7 x x x x x

X Malaybalay City* 1 x x

Valencia City* 1

XI Gen. Santos City 2 x x x

Sultan Kudarat 1 x x

Davao del Sur 1 x x

Davao City 1

XII Cotabato 1 x x x x

Total 44

Source of Basic Data: BAI

Legend: PbB –purebred Boer; PbAn – purebred Anglo Nubian; BxAn – crossbreeding of Boer and Anglo Nubian;

UpB – upgraded Boer; UpAn -Upgraded Anglo Nubian; UpS – Upgraded Saanen;

PbS- Purebred Saanen; xS-crossbreed Saanen; N- native

* Not identified

Breed/s AvailableProvince/CityRegion

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Table 11. Goat Breeds Raised in Selected

Government Farms in Provinces/Cities No. of

Farm PbB PbAn BxAn UpB UpAn UpS PbS xAl xTo N xS

CAR Baguio City 1 x x

I Pangasinan 1 x

II Tuguegarao City 1 x

Nueva Vizcaya 1 x x

Isabela* 1

III Pampanga 1 x

Nueva Ecija 3 x x x x x

IV Laguna 1 x

V Masbate 1 x

VI Negros Occidental 1 x

VII Negros Oriental* 1

Bohol 1 x x

VIII Leyte 2 x

IX Zamboanga del Sur 1 x x

Basilan 1 x

X Misamis Oriental* 1

Bukidnon 1 x

XII North Cotabato 1 x x

Total 21

Source of Basic Data: BAI

Legend: PbB –purebred Boer; PbAn – purebred Anglo Nubian; BxAn – crossbreeding of Boer and Anglo Nubian;

UpB – upgraded Boer; UpAn -Upgraded Anglo Nubian; UpS – Upgraded Saanen;

PbS- Purebred Saanen; xS-crossbreed Saanen; N- native

* Not identified

Region Province/CityBreed/s Available

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Processing

• Manufacturing of goat milk soap with

variant such as whitening goat milk,

regular goat milk soap, premium goat

milk, and sensitive skin goat milk soap

with “Kalpana” brand. This product has

been exported to Dubai, Caribbean,

United States by Kalpana International

Trading.

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Yolly Raca’s Goat’s

Milk Soap “Kalpana”

Brand 32

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Processing

• Pasteurization of Goat Milk

“Star Milk” is an emerging new brand of goat

milk currently produced by Alaminos Goat Farm

in Laguna

• St. Elmo’s Dairy is also another brand of goat’s

milk produced in Nasugbu, Batangas. There is

also one in Tarlac, Lim Dairy Milk.

• Processed canned chevon such as Chevon

Strew, Chevon in Offals Soup. Fortress Food

Manufacturing Corp. has been pioneering this

chevon canning project.

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Alaminos Boer Goat Farm with their

“Milk Star” Brand of Goat’s Milk,

Alaminos, Laguna

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Jeffrey Lim’s JSJ

Farm, Tarlac

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Table 12. Goat: Supply and Disposition,

Philippines, 2003-2005 ( in heads)

ITEMS 2003 2004 2005 %Change 05/04

TOTAL SUPPLY 5,354,842 5,563,242 5,951,759 6.98

Beginning Inventory 3,270,441 3,357,624 3,535,195 5.29

Born Alive 2,084,090 2,205,128 2,415,244 9.53

Imports 311 490 1,320 169.39

Disposition 1,997,218 2,028,047 2,217,574 9.35

Slaughtered 1,892,548 1,922,072 2,062,290 7.3

Death/Losses 104,670 105,975 155,284 46.53

Ending Inventory 3,357,624 3,535,195 3,734,185 5.63

Source: BAS

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Marketing

•Role of livestock “oksyon” markets

(LOMs) in goat marketing is vital. About

90%-95% of them are being used for

goat trading.

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Table 13. Operational and Non-operational Livestock “Oksyon

Market” in the Philippines, As of December 2006

Total Percent Share of Accredited

Operational Non-operational to total by Region

CAR 1 0 1 0.64

Ilocos 9 7 16 10.26

Cagayan Valley 4 2 6 3.85

Central Luzon 1 6 7 4.49

Southern Tagalog 12 4 16 10.25

Calabarzon 10 2 12 7.69

Mimaropa 2 2 4 2.56

Bicol 4 3 7 4.49

Western Visayas 33 4 37 23.72

Central Visayas 26 3 29 18.59

Eastern Visayas 11 1 12 7.69

Western Mindanao 1 4 5 3.21

Northern Mindanao 3 3 6 3.85

Southern Mindanao 1 2 3 1.92

Central Mindanao 9 1 10 6.41

Caraga 1 0 1 0.64

ARMM 0 0 0 -

Total 116 40 156 100.00

Percent Share 74.36 25.64 100

Region No. of Accredited Livestock Markets

Source of Basic Data: BAI

Some livestock auction markets in some part of the country where used as a venue to sold the goats.

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Table 14. Goat: Monthly Farm Gate

Price, Philippines (P/kg. Live weight)

The national annual average farm gate price of goat in 2005 was P65.43 per kilogram

MONTH FARMGATE PRICE (Live

weight) PHILIPPINES Percent Change

2003 2004 2005P 04/03 05/04

Pesos/ Kg.

January 58.05 55.51 64.42 (4.38) 16.05

February 57.97 57.34 64.50 (1.09) 12.49

March 58.50 55.38 65.00 (5.33) 17.37

April 58.93 64.55 65.17 9.54 0.96

May 58.74 65.46 65.91 11.44 0.69

June 58.81 65.93 65.44 12.11 (0.74)

July 58.46 69.35 66.22 18.63 (4.51)

August 57.57 69.43 66.60 20.60 (4.08)

September 58.49 70.00 67.61 19.68 (3.41)

October 60.18 70.71 66.98 17.50 (5.28)

November 58.55 71.16 67.71 20.92 (4.85)

December 62.58 72.41 57.60 15.71 (20.45)

Annual Ave. 58.85 65.68 65.43 11.61 (0.38)

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• Live goats are retailed in selected areas in

Metro Manila. Retail price is P220-250/kg.

• BAI has been conducting live goat, chevon,

and by-products price monitoring in Metro

Manila since 1979. Regular consultation

meeting with the different stakeholders at

national level is regularly being done on a

monthly basis.

Marketing (con’t)

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Figure 3. Average Monthly Prices of Chevon

in Metro Manila (P/Kg.)

130.00

140.00

150.00

160.00

170.00

180.00

190.00

200.00

210.00

220.00

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

(P/K

g.)

2003

2004

2005

2006

2007

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• Trading of Goats. Mejia Family (Manuel,

father, and sons Junar and Philip) is trading

1,200 goats per week or 4,800 heads per

month with P300 to P400 net profit per head

for slaughtering goats and P500-P1000 net

profit per head for breeding goats. They have

an estimated yearly income of 4.8 million per

year from goat trading, excluding vegetable

trading.

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• Popularly Known Livestock Market used in

Trading Goats

Some of the popularly known livestock market

used in goat trading include Padre Garcia

Livestock “Oksyon” Market, Batangas; Urdaneta

City Livestock Market, Pangasinan; and Uson

Livestock Market, Masbate.

• Trading of Imported Breeding Goats.

Jonnie and Jeff Valencia are also trading

imported breeder goats from Australia. 44

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Jonie (father) and Jeff (son) Valencia’s Ebenezer

Goat Farm, Capas, Tarlac. They are in Trading

Imported Goats and Breeding Goat

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Figure 4. Supply-Value Chain of Goat from Pangasinan to Metro Manila

GOAT

FARM

P5.20/kg

P14.00/kg

---

P13.00

Slaughter house

P120.00/kg

• P28.80

Provincial Trader’s Margin

P154.00/kg

• P20.00/kg

Wholesaler’s

Margin

P188.00kg

P222.00/kg

• P21.00

Wet market’s margin

Source: BAI-MDD, Esplana, Abao, Vasquez, et. al. 2008

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The Philippines is price competitive

with United States, Canada and

Australia where import

parity/domestic wholesale price is

greater than 1.

Competitiveness Analysis

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Table 14. Competitiveness of Locally Produced Goat Meat

and Imported Goat Meat In Canada, 2007

(Per MT) (Per Kg) (Per MT) (Per Kg)

FOB Price (US$ per MT)* 4,000.00 4.00 5,000.00 5.00 4,000.00 4.00 5,000.00 5.00

Feight and Insurance (US$) 450.00 0.45 450.00 0.45 450.00 0.45 450.00 0.45

CIF Manila ($) 4,450.00 4.45 5,450.00 5.45 4,450.00 4.45 5,450.00 5.45

Times Foreign Exchange rate 45.00 45.00 45.00 45.00

CIF Manila (PhP) 200,250.00 200.25 245,250.00 245.25 200,250.00 200.25 245,250.00 245.25

Plus Tariff Rate % 0.30 0.30 0.35 0.35

Tariff Cost (PhP) 60,075.00 60.08 73,575.00 73.58 70,087.50 70.09 85,837.50 85.84

Plus Handling Distribution Cost (HDC) 750.00 0.75 750.00 0.75 750.00 0.75 750.00 0.75

Total Landed Cost (PhP) 261,075.00 261.08 319,575.00 319.58 271,087.50 271.09 331,837.50 331.84

Plus Trading Cost/Margins (TC/M) at 5% 13,053.75 13.05 15,978.75 15.98 13,554.38 13.55 16,591.88 16.59

Domestic Wholesale Import Parity Price (PhP) 274,128.75 274.13 335,553.75 335.55 284,641.88 284.64 348,429.38 348.43

Domestic Wholesale Price (PhP)^ 200,000.00 200 200,000.00 200 200,000.00 200 200,000.00 200

Import Parity/Domestic Wholesale Price 1.37 1.68 1.42 1.74

* FOB price quotation, as of May 2007

^ as of May 2007

Note: Competitiveness exists if import parity/domestic wholesale price is greater than 1.

Carcasss, half-

at 35% in-quota tariff

Carcasss, half- Carcasss, half-

Price/Kilo Price/KiloPrice/Kilo

at 30% in-quota tariff at 35% in-quota tariff

carcasses, and frozen carcasses, and frozen carcasses, and frozenCarcasss, half-

carcasses, and frozen

at 30% in-quota tariff

At Different Price Quotation (FOB), Tariff

Rates and Same Exchange Rates Price/Kilo

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Table 15. Competitiveness of Locally Produced

Goat Meat and Imported US Goat Meat, 2007

(Per MT) (Per Kg) (Per MT) (Per Kg) (Per MT) (Per Kg) (Per MT) (Per Kg)

FOB Price (US$ per MT)* 6,580.00 6.58 7,678.00 7.68 6,580.00 6.58 7,678.00 7.68

Feight and Insurance (US$) 500.00 0.50 500.00 0.50 500.00 0.50 500.00 0.50

CIF Manila ($) 7,080.00 7.08 8,178.00 8.18 7,080.00 7.08 8,178.00 8.18

Times Foreign Exchange rate 45.00 45.00 45.00 45.00

CIF Manila (PhP) 318,600.00 318.60 368,010.00 368.01 318,600.00 318.60 368,010.00 368.01

Plus Tariff Rate % 0.30 0.30 0.35 0.35

Tariff Cost (PhP) 95,580.00 95.58 110,403.00 110.40 111,510.00 111.51 128,803.50 128.80

Plus Handling Distribution Cost (HDC) 750.00 0.75 750.00 0.75 750.00 0.75 750.00 0.75

Total Landed Cost (PhP) 414,930.00 414.93 479,163.00 479.16 430,860.00 430.86 497,563.50 497.56

Plus Trading Cost/Margins (TC/M) at 5% 20,746.50 20.75 23,958.15 23.96 21,543.00 21.54 24,878.18 24.88

Domestic Wholesale Import Parity Price (PhP) 435,676.50 435.68 503,121.15 503.12 452,403.00 452.40 522,441.68 522.44

Domestic Wholesale Price (PhP)^ 200,000.00 200 200,000.00 200 200,000.00 200 200,000.00 200

Import Parity/Domestic Wholesale Price 2.18 2.52 2.26 2.61

* FOB price quotation, as of May 2007

^ as of May 2007

Note: Competitiveness exists if import parity/domestic wholesale price is greater than 1.

At Different Price Quotation (FOB), Tariff

Rates and Exchange Rates

Carcasss, half- Carcasss, half- Carcasss, half- Carcasss, half-

carcasses, and frozen carcasses, and frozen carcasses, and frozen carcasses, and frozen

Price/Kilo Price/Kilo Price/Kilo Price/Kilo

at 30% in-quota tariff at 30% in-quota tariff at 35% in-quota tariff at 35% in-quota tariff

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50

Table 16. Competitiveness of Locally Produced Goat Meat and

Australian Imported Goat Meat, 2007

(Per MT) (Per Kg) (Per MT) (Per Kg) (Per MT) (Per Kg) (Per MT) (Per Kg)

FOB Price (US$ per MT)* 3,000.00 3.00 3,500.00 3.50 3,000.00 3.00 3,500.00 3.50

Feight and Insurance (US$) 450.00 0.45 450.00 0.45 450.00 0.45 450.00 0.45

CIF Manila ($) 3,450.00 3.45 3,950.00 3.95 3,450.00 3.45 3,950.00 3.95

Times Foreign Exchange rate 45.00 45.00 45.00 45.00

CIF Manila (PhP) 155,250.00 155.25 177,750.00 177.75 155,250.00 155.25 177,750.00 177.75

Plus Tariff Rate % 0.30 0.30 0.35 0.35

Tariff Cost (PhP) 46,575.00 46.58 53,325.00 53.33 54,337.50 54.34 62,212.50 62.21

Plus Handling Distribution Cost (HDC) 750.00 0.75 750.00 0.75 750.00 0.75 750.00 0.75

Total Landed Cost (PhP) 202,575.00 202.58 231,825.00 231.83 210,337.50 210.34 240,712.50 240.71

Plus Trading Cost/Margins (TC/M) at 5% 10,128.75 10.13 11,591.25 11.59 10,516.88 10.52 12,035.63 12.04

Domestic Wholesale Import Parity Price (PhP) 212,703.75 212.70 243,416.25 243.42 220,854.38 220.85 252,748.13 252.75

Domestic Wholesale Price (PhP)^ 200,000.00 200 200,000.00 200 200,000.00 200 200,000.00 200

Import Parity/Domestic Wholesale Price 1.06 1.22 1.10 1.26

* FOB price quotation, as of May 2007

^ as of May 2007

Note: Competitiveness exists if import parity/domestic wholesale price is greater than 1.

Price/Kilo

at 30% in-quota tariff at 30% in-quota tariff at 35% in-quota tariff at 35% in-quota tariff

Carcasss, half-

carcasses, and frozen carcasses, and frozen carcasses, and frozen carcasses, and frozenAt Different Price Quotation (FOB), Tariff

Rates and Exchange Rates

Carcasss, half- Carcasss, half- Carcasss, half-

Price/Kilo Price/Kilo Price/Kilo

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51

Conclusion

•The future of the goat industry is very promising for prospective investors here and abroad.

•Credit issues for existing players (constrains them to expand their operations).

•Philippine chevon is price competitive vis-à-vis Australia, Canada, and U.S.A. chevon.

•Although the study covered important areas along the supply chain, there is still a need to further document other success stories.

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Recommendations and Strategic

Directions

• Development of local goat genetics for the international market.

• Revive non-operational livestock auction markets for goats.

• Continuous partnership of all stakeholders.

• Support of government in packaging investment opportunities along the supply chain (utilization of ACEF funds).

• Promote the potential export market of Philippine goat meat, goat processed meat and goat by-products.

• Pursue more researches along the supply chain which are market-driven and customer-focused.

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This material could be downloaded at

http://www.smileyberks.com/cpr and

http://cprstudies2038.multiply.com

Page 52: Current Situation and Development in the Small Ruminant (Goat) Industry Supply Chain

References Esplana, Elmer R. Lary Nel B. Abao and Rolando M. Vasquez. (October 2007). Development in the

Supply Chain of the Philippine Goat Industry: An Assessment. Club of Professional Researchers

and Bureau of Animal Industry. Received Grand Prize Award in Socio-economic Research. National

Research Symposium. Bureau of Agricultural Research. Department of Agriculture.

Esplana, Elmer R. Lary Nel B Abao, Rolando M. Vasquez, Manolita Z. Gaerlan and Rolando R.

Promentilla. (August 2008). Best Practices within the Supply Chain of the Philippine Goat

Industry for Policy-Makers and Prospective Investors. Bureau of Animal Industry .

Esplana, Elmer R (January 30, 2009). Goat Supply Chain Management and Agribusiness

Opportunities in the Philippine Goat Industry. Powerpoint presentation presented at the Goat

Agribusiness Seminar, Santa Cruz, Marinduque.

FGASPAPI Website: http://www.fgaspapi.com

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Page 53: Current Situation and Development in the Small Ruminant (Goat) Industry Supply Chain

Acknowledgement is given to the following people:

OIC-Director Dr. Davinio P. Catbagan, Bureau of Animal Industry.

Rolando R. Promentilla, Chief, Marketing Development Division, BAI.

Fellow goat researchers in BAI, Lary Abao and Rolando Vasquez and

Marketing Intelligence and Special Project Chief Manolita Z. Gaerlan.

All members of the Seminar, Exhibit and Tiangge Committee of the 79th

BAI Foundation Anniversary and the organizing committee of this year’s

anniversary.

All BAI staffmembers, particularly, my fellow employees in the Marketing

Development Division.

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