Jul 11
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Which product is the most valuable when Ostrich Farming
Ostrich farming produces a number of products. Ostrich Farming Sources of Revenue illustrated how there are a number of market sectors that the ostrich supply. These are Meat, leather, cosmetics, pharmaceutical, fashion and craft. Then there are sub-markets within those different market sectors. But which is the most valuable?
When ostrich production was strictly controlled under a single channel marketing cooperative, they were able to build a market based on the ostrich skin. The ostrich skin was turned into beautiful leather, with the best ostrich skins selling for in excess of US$40 square foot.
This would yield revenue of around US$500 – US$600 per bird. This is the per bird value of the finished leather sold into the leather manufacturing markets such as the very high end handbag markets in Japan, Italy and cowboy boot market in Texas.
It is important to remember, these high figures were only the very top grade skins, average returns were a lot lower and the above are post tanning values, not farmer value. At that time ostrich meat was considered low value and sold as a filler ingredient in low value processed meat products. With production strictly controlled there was insufficient volume to supply meat markets in any quantity.
However, as production became deregulated the ostrich leather market changed. There were a number of reasons for this including changes in the fashion industry as the fashion industry. By its very nature, the fashion industry is subject to change from year to year. Today the average raw ostrich skin farmer payment may not achieve greater than US$50 and many have no value if they are poorly produced.
The core product that will form the foundation for the ostrich farmer is ostrich meat. A strong ostrich meat market provides the foundation to support regular production enabling development of the ostrich skin and ostrich oil markets.
What is the likely revenue from meat? Clearly the revenue from meat depends on the yield as discussed in Influence of Meat Yields on Ostrich Farming Profitability. As yields increase the processing costs per kilo reduce, enhancing the overall returns.
As Influence of Meat Yields on Ostrich Farming Profitability illustrated meat yields currently remain extremely variable often as low as 20kgs but with potential of 50kgs and above. Assuming the quality of the meat is the same and selling at an average of say $14/kg for all muscles, that puts the value per bird between $280 (20kg yield) and $700 (50kg yield).
Clearly this differential is very significant illustrating clearly how high yielding meat production birds ensure meat provides the foundation for the business providing excellent revenue opportunity. The revenue for skin and oil can be extremely valuable by-products. The return for the ostrich farmer will depend on the payment structure in place but should reflect the yield.
The future of ostrich farming depends on development of production systems that enable production of high quality meat at commercial levels of production.
