The Cattle Industry of the Region
I. Industry Structure
Scope of the Industry
Beef Cattle is under the Major Division A. Agriculture, Hunting and Forestry, Division 02. Farming of Animals, Group 022. Livestock Farming (Except Hogs), Class 0221. Beef Cattle Farming (Including Feedlot Fattening)
This group includes farming of domestic animals such as carabao, cattle, sheep, goats, horses, assess, mules or hinnies, including provision of feedlot services.
Source: Philippine Standard Industrial Classification (PSIC), NSO
Products and Linkages
Cattle and intake specifications
One most important factors in the cattle industry operation either feedlot fattening and ranching is the intake specification of cattle. The intake specification should fit the demand or market preference and most importantly the ability of the animal to perform under the Philippine conditions and these include, breed selection, brand, sex, age, weight and price.
1.1. Breed Selection
The breed of cattle, either for fattening or breeding, is one of the most important intake specifications as it affects the operation, management, market preferences and most of all the profitability of the industry
The availability of hybrid vigor and bloodline crosses should be taken advantage by the cattle raisers. A tropical born or raised cattle requires less management skill than the non-tropical raised cattle.
1.2 Brand
The brand of cattle is likewise important. There are at least 195 breeds of different brands of cattle today. Most commonly raised in the country are Brahman, Brangus and Simbrah. Familiarity in raising these animals affects management and profitability.
1.3. Sex
Sex of animals is selected on market suitability and contribution to profit. Heifer can grow and convert nearly as well as Steers, which have low buying price at source. Bulls can also be fed profitably. Cows are more difficult to feed and have low feed conversion rates and higher death rates.
1.4. Age
In cattle operations, while age of the animal is important, it is the weight for age that affects performance to a greater extent. This holds true most in feedlot operation. Age influences tenderness, fat deposition, feed conversion, and growth rates. Age of the animals is also market driven.
1.5. Weight
Cattle of lesser weight than what is supposedly standard upon entry require improved feeding performance. It means, feeding the animal longer. Feeding cattle that are too light on induction or entry has a profound effect on profits as it reduces the number of stock turns.
1.6. Price
Market forces set intake price per kilogram of live cattle but this has to be balanced with class and quality of cattle and its ability to perform under the Philippine condition.
Other intake specification of varying degrees of commercial importance are color, butt shape or muscle score, muscle bone ration, bone shape, horns and appearances
2. Ration
Rations or feedstuff are animal food that are commonly used and source out or grown locally. Commonly used feedstuff are the following :
2.1. Forages and Farm By Product Roughage
Forages are grasses or legumes usually grown in the grazing areas or field. The factors that determine the feeding value of forages are the seasons of the year and geographical location. During rainy season, the water contents of forages run as high as 90 percent diminishing the nutrient contents. Tropical forages require intensive management to obtain maximum quantity and quality of digestible nutrients. One of the commonly used forages among ranchers today is Napier grass
Corn as forage is not yet widely used and practiced in the country and the region as well. Some big companies like the Del Monte Philippines, Inc., used corn as forage on a limited scale only.
Generally, farm by-products have low feeding value and can only be fed to certain levels. Farm by-products that may be fed are corn stover, sugar cane tops, weeds from cropland, rice straw and ipil-ipil leaves, among others.
2.2. Water
The water needs of animals are influenced by several factors such as type of diet, feed intake. Environment temperature, rate and composition gain, pregnancy, lactation and activity. Mature cattle are provided with 40 liters of water daily.
2.3. By Products Concentrates
The by-products of industrial and cereal grains processed for human consumption constitute the bulk of concentrates for feeding cattle. These could serve as supplement to forage and roughage for well-balanced rations. The commonly by-products concentrates are rice bran, wheat pollard, corn bran, copra meal, corn gluten feeds, molasses, pineapple pulp, soya meal and cottonseeds.
3. Transportation
Transportation is also vital to the cattle industry. There are two types of transportation used in transporting the animals. Prime mover vehicle mounted with cattle holding pens where cattle are keep in place while on travel are used primarily to transport animals in mass or in numbers. Cargo ships are also used in transporting live animals from one port to another port in the country. The feedlot operator for the transport of their product charters the ships.
4. Breeding Supplies, Materials and Equipment
Availability of the breeding supplies, materials and equipment are most important for the success of cattle farming, especially in breeding and production. These should be made readily available as this defines the success and failure of the industry. The following is the list of breeding supplies, materials and equipment.
List of Breeding Supplies, Materials and Equipment
Breeding Practice
Supplies, Materials and Equipment
Natural Breeding
Breeding Bulls
Cows or Heifers
Breeding Chutes or Pens
Artificial Insemination
Cows or Heifers
Liquid Nitrogen Plant
Mother LN Tanks
Field LN Tanks
AI Guns
Semen
Breeding Chutes or Pens
Embryo Transfer
Recipient Cows or Heifers
Frozen Embryo
ET Equipment and Supplies
5. Operation
There are two major components in cattle raising, namely, ranching and cattle fattening;
5.1. Ranching
Ranching operation is characterized by raising cattle in extensive, native or sown pasture for the purpose of producing breeder and feeder stocks. Breeding and production is done in open field or pasture area. It is also known as cow-calf operation that includes calving, weaning, branding, de-horning, and castrating. Breeding is done either by artificial insemination or by natural method.
5.2. Fattening
In cattle fattening, animals are raised or fattened in close and confine quarters. Rations are given right through its quarter. Fattening operation takes four to six months and finished cattle for marketing approximately weights between 450-550 kilos.
6. Slaughterhouse and other support facilities
The bulk of the animals in the region are slaughtered in government-run or operated abattoirs. These are located mostly in the municipalities and cater primarily to the needs of the locality. Most of these slaughterhouses are non-accredited and have inadequate facilities. Some private firms, however, have its own slaughterhouses to serve its own purposes.
The absence of triple A slaughterhouse, cold storage and blast freezing facilities in the region prevented the industry to embark into high value production and processing. More so, the absence of these much-needed facilities negates the investment of the cattle raisers in genetics and nutrition.
7. Outbound Logistics
7.1. Product
The product is a live cattle at an average weight between 450-480 kilograms for feedlot-finished cattle.
7.2. Supply
Supply of cattle in the country for the year 2000 remained almost the same due to insignificant increment in calf-drop and large reduction in live imports. Total supply stood at 3.33 million heads, up by only 0.41 percent from last year’s head count of 3.32 million.
About 24 percent of the total supplies were slaughtered for meat purpose while 0.8 percent was due to death and losses. Total cattle sold and slaughtered grew by 0.12 percent while death and losses declined by 11.15 percent compared to previous years. Despite large reduction in deaths, low calf drop resulted to low level of ending stocks, which recorded an increment of only 0.65 percent. Table I.
Table I. Supply and Disposition, Live Cattle, Philippines, 1999-2000, In Thousand Heads.
Items
1999
2000
Percent Change | Total Supply
3,321.06
3,334.63
0.41 | Beginning Inventory
2,425.90
2,478.70
2.18 | Born Alive
658.28
659.15
0.13
| Imports*
236.88
196.78
-16.93 |
Disposition
842.36
839.73
-0.31 | Slaughtered/Sold
810.16
811.12
0.12 | Death/Losses
32.20
28.61
-11.15 | Ending Inventory
2,478.70
2,494.90
0.65
|
Source: Bureau of Agricultural Statistics * Bureau of Animal Industry
In Region 10, total number of live cattle sold had increased for the past four years. It reached to 97, 244 heads in 1999 from 75,628 in 1998 or 28.58 percent change from the previous year. Of the total number of cattle sold in 1999, 45.73 percent or 44,473 heads were shipped out or sold to other regions. Table 2.
Table 2. Number of Cattle Sold, Region 10, 1996-1999.
Item
1996
1997
1998
1999
| Shipped-out
20,431
33,941
36,461
44,473
|
Slaughtered
34,855
38,900
39,167
52,771
| Total Sold
55,266
72,841
75,628
97,244
|
Source: Bureau of Quarantine, Department of Agriculture, Region 10. National Meat Inspection Commission
7.3. Farmgate Price as of CY 2000
The annual average farmgate price of live cattle in year 2000 was P 47.89 up by 9.94 percent from the previous year of P 43.56.
7.4. Sales
Total sales of live cattle of the country in year 2000 amounted to P 38,844,536 million. It is P 3 million higher over last year’s sale of P 35,290,569 million. Region 10, on the hand, had a total sale of live cattle in 1999 in the amount P 4.2 million.
C. Number and Size of Firms
The Federation of Cattle Raisers Association of the Philippines in its 1999 of June report (The Beef Cattle Industry, Situation, Challenges, Opportunities and Strategic Direction) had 536 member-ranchers all over the country. However, reports on their status, performance or operation are presently not available.
In 1999, the region had a total of 88 commercial cattle raisers (feedlot and ranch operators). Today the number has reduced to 25. Table 3.
Table 3. Number of Commercial Cattle Raisers, Region 10, 2001.
Province
1999*
2001** | Bukidnon
73
18 | Misamis Oriental
15
7 | Total
88
25 |
Source: * Department of Agriculture 10 ** Federation of Cattle Raisers Association of the Philippines, Cagayan de Oro City
As of 2001, the region had a total of only 47 active pasture leaseholders or 17 percent from the total of 281 leaseholders. Twenty-nine of these had expired permits which are still subject for renewal while the majority of the holders, 72.95 percent or 205 had cancelled permits. Reasons as to the cancellation of permits were not made available in the report. Table 4.
Table 4. Status of Pasture Leaseholders, Region 10, 2001.
Status
Number
Active leaseholders
47
With expired permits*
29
With cancelled permits
205
Total leaseholders
281
Source: Department of Environment and Natural Resources, Region 10 * Subject for renewal
Bukidnon, which has the largest cattle population in the region, has 26 pasture leaseholders; Misamis Oriental has 12 and Misamis Occidental 9 holders to a total of 47. Table 5.
Table 5. Number of Pasture Leaseholders, Region 10, By Province, 2001.
Province
Number
Bukidnon
26
Misamis Oriental
12
Misamis Occidental
9
Total
47
Source: Department of Environment and Natural Resources, Region 10
The number of commercial firms, which are into cattle breeding and production remarkably, went down in the last decade. Some had limited their scale of operation while others temporarily closed their operation. The decline in their numbers would indicate a corresponding decrease in the breeding base and a subsequent drop in domestic sources for fattening calves. The feedlot operators suffered also the same fate, as there was less supply of fattening calves coming from the domestic sources or the ranchers.
D. Key Players in the Sector
The key players in the sector are:
· The Federation of Cattle Raisers Association of the Philippines (FRACP) is the main umbrella or group of cattle raisers who are into cattle breeding and production.
· The Cattle Feedlot Association of the Philippines (CFAP) is also the main group of cattle raisers who are into cattle fattening.
· Local Government Units Support of the Local Government Units to projects such as outgrows and customized feeding program is necessary for its success.
· National Government Agencies, Agricultural State Colleges and Universities,
· Research Institutions and
· Government Financial Institutions
E. Entry Barriers
Capital Requirement
Cattle breeding and fattening requires a big capital outlay. The lack of capital prompted some cattle raisers to close down. Others limit their scale of operation.
There is only one government financial institutions in the region 10 today, which have special window for cattle breeding and production. Low collateral value of agricultural land prohibits cattle raisers from securing additional or fresh capital from the financial institution.
Access to Necessary Inputs
Access to inputs especially on breeding stocks of hybrid vigor or bloodlines crosses are difficult and expensive to obtain. Most backyard raisers, which comprises 92 percent of the total cattle inventory estimates in the country today, have difficulty or have little access to breeding bulls.
Breeding supplies, materials and equipment on one hand are limited. Facilities such as liquid nitrogen plant, research laboratory and testing centers needs improvement
Government Policy
The government policy on ancestral domain, the comprehensive agrarian reform law, the management of pasture leased lands and the increase in pasture lease rentals, among others, are some government policies that affects the development of the industry.
