KMT Livestock Research
A Mapping and Analysis of Livestock Finishing and Fattening Enterprises and Business Models in Kenya
Meat consumed or exported from Kenya is mainly produced from cattle, sheep and goats, camels, pigs, and poultry
Among these livestock species, cattle produce most of the meat (77%) followed by sheep and goats (19%), and camels (4%). Kenya has a livestock herd of approximately 18.3 million cattle, 25.7 million goats, 18.7 million sheep, 3.3 million camels, 40 million indigenous poultry, 4.2 million layers, 3.7million broilers, 1.2 million other poultry (Turkeys, Ducks, Quails, Guinea fowl, Geese, Pigeons and Doves), 2.2 million donkeys and an undetermined number of companion, game and aquatic animals (MoALF, 2017). With most livestock (70%) being produced by pastoralists, under extensive production systems and customarily kept as assets, livestock production in the country has primarily been subsistence-oriented characterised by low reproductive and productive performance, with minimum technology and human interference, and only traded when necessary.
Where Does the meat Kenya consumes come from?
As not enough meat is produced locally to meet the domestic requirements for animal protein, the country continues to import beef on the hoof from neighbouring countries.
Livestock is imported from Ethiopia through Moyale and Wajir, from Somalia through Garissa, Wajir and Mandera, from Tanzania through Kajiado, and from South Sudan and Uganda through Turkana and West Pokot, respectively (Figure 1). This is also compounded by the heavy dependence on rain-fed pasture resources for the pastoral production systems which are prone to climate change-related threats including drought, dysfunctional rangeland resource management, as well as the subsistence-based approach to markets by the majority of producers.
Study Approach and Methodology
This study was undertaken country-wide, covering different market routes in the arid and semi-arid areas (ASALs), and drawing out the various finishing and fattening models. Data was collected in August 2019 covering F&F operations in Nakuru, Laikipia, Nyeri, Kajiado, Garissa, Kitui, Taita Taveta and Kwale counties. These counties were based on a mapping exercise that identified these counties as the predominant locations for finishing and fattening operations.
The main market/trade routes for livestock, in the arid and semi-arid areas (ASALs), were identified, and documented through a detailed review of literature, and expert interviews. This was complemented by primary data collection from the various finishing and fattening models, during which business model information of the different operations was collected. Information on the livestock species and breeds kept, sourcing and selection of finishers and fatteners, the feeding regime, F&F cycles, and operations, performance monitoring, marketing, the end markets for livestock and an operators’ assessment of profitability was gathered.
Livestock production in Kenya is characterized by a diversity of climates, environmental conditions, animal phenotypes, and management systems. On the one hand, there is extensive livestock production where productivity is low alongside a parallel chain which incorporates formal finishing and fattening methods in ranches or commercial feedlots. The later involves intensive forage management, health control, and modern management practices and is estimated to supply approximately 2% of Kenya’s red meat, selling to hotels, restaurants, and supermarkets targeting high-income consumers.
Intensive Finishing Model
The objective of the model is to get animals to market by the time that they are 36 months old at an optimal weight of 500 – 600Kg. The animals, mainly steers aged 24 – 30 months, were brought into the feedlot at 250 – 300Kg.
Semi-Intensive Finishing Models
In this model, animals are selected at 24-30 months of age. They are then taken through a process of finishing that combines grazing, on improved or reserve fodder which includes both grass and legumes, and supplementation on concentrates and grains.
Extensive finishing model
Under the extensive finishing model16, animals are selected for finishing after weaning (at 12 months) and fed purely on grass until they reach the target slaughter weight.
Intensive Fattening Models
In this model, the feedlotters brought purchased animals and fattened them in large paddocks using bought-in complete feeds or farm-grown/prepared feeds.
This model is more common in coastal, and some Laikipia ranches, where the animals were confined and trough-fed for the day and let to graze in the other part of the day.
Extensive fattening model
Under this model, animals are grazed on natural pastures, with supplementary hay during periods when standing fodder is not available.
F&F profit margins is a function of animal purchasing and selling prices, feed costs, utilization efficiency, and the time spent in the feedlot (Mkonyi et al., 2006; Malope et al., 2007; Mlote et al., 2012). The purchasing price for animals at entry into the finishing or fattening systems accounts for 60% of the costs under the intensive scheme, 50% of costs under the semi-intensive and up to 70% of the cost under the extensive systems. The significant difference is as a result of the different type of animals that are preferred under each model, and the target entry weight for the different systems.
The figures below show the comparison of the gross margins across the different fattening and finishing models. From the financial analysis, the intensive finishing model is the most profitable, compared to the semi-intensive and extensive model. The significant difference in the profitability of the intensive model is mainly because the model achieves a higher weight gain per day (as demonstrated in the performance comparisons tables), the management costs are relatively lower, and the meat from the intensive systems generally attracts premium prices in the market when compared to the other two models.
Conclusion and Recommendations
The study identified a number of systemic constraints to the F&F sub-sector, including inefficiencies, limited integration between the sub-sector and the suppliers of fatteners and finishers, high costs of feeds and challenges in the enabling environment. Below we identify some of the important market interventions that can address these challenges:
Market interventions to address the inefficiencies within the F&F sub-sector
- Improve the efficiency of the intensive feedlots
- Improve scale and aggregation to unlock the supply chain efficiencies
- Provision of technical assistance to finishing and fattening operations
- Strengthening of support services for the sub-sector, including improving access to capital, supporting improvements in the feed inputs markets, transportation, and infrastructure services
- Improving efficiencies within the ranches
Improve integration between F&F sub-sector and pasto- ral production and markets to address the supply of quality and quantity of fatteners and finishers
Although the F&F sub-sector is dependent on the pastoral producers and markets, for the supply of fatteners and finishers, there were no established channels linking the two parts of the market system. As a result, pastoralists were not meeting the market requirements of the F&F operators.
Interventions to improve the policy and legislative
Interventions to create a favourable environment for the F&F sub-sector include:
- Addressing conflicts, invasions and wildlife-human conflicts that have direct impacts on the security of the F&F operations, especially in the coastal and Laikipia ranches;
- Reducing costs associated with markets such as multiple taxations by the counties and informal fees charged as animals move to markets;
- Reducing import tariffs on raw materials for animal feed inputs while strengthening quality assurance of current inputs available in the market.