Market study with insights into commercial and home-mix animal feed sectors in Kenya
FeedTechKenya is a consortium of leading Dutch and Kenyan parties active in various areas of the feed value chain. The consortium aims to transfer best feed practices, increase the production and take-up of productivity-enhancing quality animal feed, and trial with novel and affordable feeds. FeedTechKenya closely cooperates with the Dutch Embassy in Nairobi (EKN). The consortium includes Aeres Training Centre International, Almex Extrusion Techniques, Ottevanger Milling Engineers, Unga Farm Care ltd, Insectipro and Nutreco Africa. Larive International and Lattice Consulting initiated and coordinate the partnership.
The Kenyan animal feed sector is characterized by a large number of small, unregistered feed millers. Experts estimate that in 2016 commercial feed producers contributed roughly 55% to the domestic demand for animal feeds. This has dropped to 45-50% in 2020. The share of demand fulfilled by the non-commercial side of the market, consisting of smaller-sized unregistered regional millers and home/community-based feed mixers, is expected to increase. Home-mixing or small and unregistered production by any means does not imply that the resulting feeds do not adhere to quality standards. However, the growing population of small millers and the large tendency to home-mix feeds make it challenging to monitor whether standards for responsible animal farming are met.
To get more insight into the sector Larive International and Lattice Consulting investigated topics related to the Kenyan animal feed sector that received relatively little attention in existing research, such as the contribution of non-commercial feed milling to the animal feed market size. The study, focusing on poultry, dairy, pig and tilapia feed in Kenya, has uncovered numerous interesting insights.
1) Consumption of commercial and non-commercial feed is highly location dependent
Kenyan farmers with different production systems have different feed usage characteristics. The study reveals that the proportion of commercial and non-commercial feed used varies with the intensity of the production system. How production systems are distributed across Kenya determines where commercial and non-commercial feed consumption materializes.
Within poultry farming, for example, an indigenous bird, categorized into backyard, improved or commercial birds, consume on average roughly 25% commercial feed (75% non-commercial feed). Commercially reared poultry birds on average consume 77% commercial feeds. Commercial poultry farms are concentrated in and around Nairoibi. The geographic consumption of commercial feed, of which the majority is accounted for by commercial poultry farms, follows this distribution (figure below).
2) Within dairy farming, high-quality forages can strengthen the appreciation of quality commercial supplementation
A primary reason for farmers to home-mix feeds is to cut on feed costs. Though, home-mixing is not only done by small farmers that are not able to afford commercial feeds. Larger commercial and intensive farmers, which are found to be very keen on promoting animal health, also mix feed themselves. Furthermore, they tend to more frequently invest in testing technology to gain more insight into the feed inputs they administer to animals.
Intensive dairy farmers are aware of the benefits an improved diet has on milk production. These intensive farmers tend to mix ingredients with forages to arrive at a nutritious total mixed ration (TMR). In this case, fodders and dairy supplements are fed jointly. Preparation of a TMR occurs through on-farm home-mixing.
Compensating poor quality fodders with good quality commercial dairy supplementation is difficult. In some cases, when the performance of cows being fed with a TMR is below expectations, not the poor-quality forages are blamed for low milk production, but the commercial supplements. Hence, ensuring that all individual components of a dairy cow’s diet are up to standards is required for the quality of commercial supplements to be acknowledged.
3) Commercial feed prices per kg can be 15-30% higher than the cost to home-mix one kg of feed, depending on feed effectiveness and raw material pricing.
Home-mixing feeds is generally cheaper than using commercial feed alternatives, though a variety of factors come into play when determining the actual cost advantage. For instance, poor quality raw ingredients can lower productivity, and increase the cost of using the home-mixed feed. Fish meal is a common ingredient used that has large variations in quality within Kenya. Middlemen, transporting fish meal from Lake Victoria to Nairobi, try to earn ‘quick money’ by adding sand to fish meal. The added weight resulting from adulteration reaches up to 50% of the original weight.
Fluctuating raw material prices can shrink the cost advantage of using home-mixed feeds. Raw material prices fluctuate in line with positive and negative supply shocks during rain and dry seasons, respectively. The price for an 8 kg bag of maize in Augustus 2019 amounted to 2,700 KSh, while the price of the same bag in November 2019 amounted to 3,500 KSh, signifying a price increase of 30%.
On-farm feed wastage during milling and storage and poor formulation equipment can affect cost reduction similarly. The study reveals that intensive layer farmers on home-formulated feeds waste ± 1 gram of feed per animal per day.
For this study, the project team interviewed 57 stakeholders with different positions in the animal feed value chain. Estimates and conclusions from analyses have been validated with industry experts.
In case you are interested to receive a copy of the full study report, please send a request e-mail to Koen van den Bosch: firstname.lastname@example.org
The consortium includes Aeres Training Centre International, Almex Extrusion Techniques, Ottevanger Milling Engineers, Unga Farm Care ltd, Insectipro and Nutreco Africa. Larive International and Lattice Consulting initiated and coordinate the partnership.
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