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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
Copyright © 2007 Esplana, Elmer, Lary Nel Abao, Roland Vasquez
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
Supply Chain and Supply Chain
Management and Current Situation of
the Philippine Small Ruminant (Goat)
               Industry



                                       3
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.



                                                                4
Introduction
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.

                                                   5
Supply Chain Framework




                         6
•According to Price Water Coopers

 “Nowadays, it is supply chains
 that compete in supply chains.”
    Supply chain is driven by
       consumers demand.
                                    7
• 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.
                                                   8
• 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.

                                                                   9
Objectives
The objectives of this presentation include:
  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.
                                                                          10
Input Supply
                Table 1. GOAT: Inventory by Farm Type,
              Philippines, January 1, 2003-2007 (in heads)
                    2003      2004       2005       2006          2007
 Farm Type
                 (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
• Goat inventory is increasing by six percent per year (BAS).
                                                                            11
Figure 2. Goat Inventory in Top Producing Regions, 2007



                     13%


                        8%
                             15%
                                    13%


                                        9%

                                                          12
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.                                                13
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-NVQS
There 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.
                                                                    14
• 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.
                                               16
Neo Abalos Goat Farm in Pangasinan




Neo Abalos Goat Farm in Pangasinan




                                       17
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.


                                                 18
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
                                                                           19
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




                                                                                   20
Production
• Goat Production Performance: Second to the
  most stable positive growth from 2001 to
  2006, although very minimal.




                                               21
Table 4. Livestock Volume of Production
Table 4. Comparison of Livestock Volume of Production (In Thousand Tons),
                               And Growth Rates from 1995 to 2006

                                   (1995-1998) (1999-2002) (2003-2006)
    Volume of Production                                                 2005       2006 % Change
                                   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
Source of Basic Data: BAS
Average GR- Growth rate per year

                                                                                                      22
Table 5. Volume of Goat Production, by
                Quarter,
        Philippines, 2004 - 2006




Source: BAS

                                         23
Table 6. Average yearly growth rate of livestock and
         poultry production from 1998-2007
     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)
  Source of Basic Data: BAS
                                                                     24
Table 7. Goat industry Volume of Production and Average Growth Rate per Year, 1998 to 2007
                                                (In Thousand Tons)

 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
Source of Basic Data: BAS




                                                                                                        25
Livestock Value of Production
Table 8. Comparison of Livestock Value of Production (In Constant Prices),
            And Growth Rates/or P million from 1995 to 2006

                                    (1995-1998) (1999-2002) (2003-2006)
      Value of Production                                                    2005        2006 % Change
                                    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
 Source of Basic Data: BAS                                                                                  26
 Average GR- Growth rate per year
Table 9. Goat Industry Value of Production and Average Growth Per Year from
                           1998 to 2007 (In P Billion)
          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
Source of Basic Data: BAS




                                                                                                                                       27
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.




                                               28
Table 10. Goat Breeds Raised in Selected
                      Private Farms in Provinces/Cities
                                            No. of                                  Breed/s Available
 Region             Province/City
                                            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


                                                                                                                                   29
Table 11. Goat Breeds Raised in Selected
                      Government Farms in Provinces/Cities
                                            No. of                                  Breed/s Available
 Region            Province/City
                                            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

                                                                                                                                30
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.

                                            31
Yolly Raca’s Goat’s
Milk Soap “Kalpana”
       Brand          32
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.                            33
Alaminos Boer Goat Farm with their
 “Milk Star” Brand of Goat’s Milk,
        Alaminos, Laguna




                                     34
Jeffrey
 Lim’s
  JSJ
Farm,
Tarlac
      35
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

                                                                          36
Marketing
•Role of livestock “oksyon” markets
 (LOMs) in goat marketing is vital. About
 90%-95% of them are being used for
 goat trading.




                                            37
Table 13. Operational and Non-operational Livestock “Oksyon
       Market” in the Philippines, As of December 2006
                        No. of Accredited Livestock Markets   Total   Percent Share of Accredited
        Region
                         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
 Source of Basic Data: BAI
Some livestock auction markets in some part of the country
where used as a venue to sold the goats.                                                               38
Table 14. Goat: Monthly Farm Gate
         Price, Philippines (P/kg. Live weight)
                                     FARMGATE PRICE (Live
                          MONTH                                   Percent Change
                                      weight) PHILIPPINES
                                    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)




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

                                                                                      39
Marketing (con’t)
• 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.

                                                 40
Figure 3. Average Monthly Prices of Chevon
                               in Metro Manila (P/Kg.)

          220.00

          210.00

          200.00

          190.00                                                                     2003
                                                                                     2004
(P/Kg.)




          180.00
                                                                                     2005
          170.00
                                                                                     2006
          160.00                                                                     2007

          150.00

          140.00

          130.00
                   Jan   Feb   Mar   Apr   May Jun   Jul   Aug Sep   Oct   Nov Dec

                                               Month
                                                                                            41
• 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.

                                                  43
• 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
Jonie (father) and Jeff (son) Valencia’s Ebenezer
 Goat Farm, Capas, Tarlac. They are in Trading
       Imported Goats and Breeding Goat




                                                    45
Figure 4. Supply-Value Chain of Goat from
       Pangasinan to Metro Manila
                                                   P154.00/kg
   P120.00/kg             P5.20/kg
      GOAT                                                 ---
     FARM
                                                     • P28.80
                                                                            P14.00/kg
                                                      Provincial Trader’s
                                                      Margin


              P188.00kg


                                                                       P222.00/kg

           •P20.00/kg                        P13.00
           Wholesaler’s                  Slaughter house
           Margin                                                     • P21.00
                                                                       Wet market’s
                                                                        margin
  Source: BAI-MDD,
  Esplana, Abao, Vasquez, et. al. 2008
Competitiveness Analysis


The Philippines is price competitive
  with United States, Canada and
       Australia where import
 parity/domestic wholesale price is
           greater than 1.



                                       47
Table 14. Competitiveness of Locally Produced Goat Meat
         and Imported Goat Meat In Canada, 2007

                                                 Carcasss, half-                          Carcasss, half-              Carcasss, half-               Carcasss, half-
                                             carcasses, and frozen                    carcasses, and frozen        carcasses, and frozen         carcasses, and frozen
 At Different Price Quotation (FOB), Tariff         Price/Kilo                              Price/Kilo                    Price/Kilo                   Price/Kilo
     Rates and Same Exchange Rates
                                              at 30% in-quota tariff                   at 30% in-quota tariff       at 35% in-quota tariff        at 35% in-quota tariff
                                            (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.
                                                                                                                                                                           48
Table 15. Competitiveness of Locally Produced
 Goat Meat and Imported US Goat Meat, 2007
                                                 Carcasss, half-                            Carcasss, half-               Carcasss, half-               Carcasss, half-
                                             carcasses, and frozen                     carcasses, and frozen          carcasses, and frozen         carcasses, and frozen
 At Different Price Quotation (FOB), Tariff
                                                    Price/Kilo                                Price/Kilo                     Price/Kilo                    Price/Kilo
          Rates and Exchange Rates
                                              at 30% in-quota tariff                    at 30% in-quota tariff         at 35% in-quota tariff        at 35% in-quota tariff
                                            (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.




                                                                                                                                                                             49
Table 16. Competitiveness of Locally Produced Goat Meat and
                    Australian Imported Goat Meat, 2007
                                                             Carcasss, half-                    Carcasss, half-                    Carcasss, half-           Carcasss, half-
                                                         carcasses, and frozen              carcasses, and frozen              carcasses, and frozen     carcasses, and frozen
 At Different Price Quotation (FOB), Tariff
                                                               Price/Kilo                         Price/Kilo                          Price/Kilo                Price/Kilo
        Rates and Exchange Rates
                                                          at 30% in-quota tariff             at 30% in-quota tariff             at 35% in-quota tariff    at 35% in-quota tariff
                                                          (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.


                                                                                                                                                                              50
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.
                                                  51
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.
                                                           52
This material could be downloaded at
http://www.smileyberks.com/cpr and
http://cprstudies2038.multiply.com
                                       53
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




                                                                                                   54
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.



                                                                           55

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

  • 1. 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 Copyright © 2007 Esplana, Elmer, Lary Nel Abao, Roland Vasquez
  • 2. 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
  • 3. Supply Chain and Supply Chain Management and Current Situation of the Philippine Small Ruminant (Goat) Industry 3
  • 4. 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. 4
  • 5. Introduction 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. 5
  • 7. •According to Price Water Coopers “Nowadays, it is supply chains that compete in supply chains.” Supply chain is driven by consumers demand. 7
  • 8. • 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. 8
  • 9. • 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. 9
  • 10. Objectives The objectives of this presentation include: 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. 10
  • 11. Input Supply Table 1. GOAT: Inventory by Farm Type, Philippines, January 1, 2003-2007 (in heads) 2003 2004 2005 2006 2007 Farm Type (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 • Goat inventory is increasing by six percent per year (BAS). 11
  • 12. Figure 2. Goat Inventory in Top Producing Regions, 2007 13% 8% 15% 13% 9% 12
  • 13. 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. 13
  • 14. 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-NVQS There 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. 14
  • 15. • 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. 16
  • 16. Neo Abalos Goat Farm in Pangasinan Neo Abalos Goat Farm in Pangasinan 17
  • 17. 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. 18
  • 18. 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 19
  • 19. 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 20
  • 20. Production • Goat Production Performance: Second to the most stable positive growth from 2001 to 2006, although very minimal. 21
  • 21. Table 4. Livestock Volume of Production Table 4. Comparison of Livestock Volume of Production (In Thousand Tons), And Growth Rates from 1995 to 2006 (1995-1998) (1999-2002) (2003-2006) Volume of Production 2005 2006 % Change 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 Source of Basic Data: BAS Average GR- Growth rate per year 22
  • 22. Table 5. Volume of Goat Production, by Quarter, Philippines, 2004 - 2006 Source: BAS 23
  • 23. Table 6. Average yearly growth rate of livestock and poultry production from 1998-2007 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) Source of Basic Data: BAS 24
  • 24. Table 7. Goat industry Volume of Production and Average Growth Rate per Year, 1998 to 2007 (In Thousand Tons) 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 Source of Basic Data: BAS 25
  • 25. Livestock Value of Production Table 8. Comparison of Livestock Value of Production (In Constant Prices), And Growth Rates/or P million from 1995 to 2006 (1995-1998) (1999-2002) (2003-2006) Value of Production 2005 2006 % Change 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 Source of Basic Data: BAS 26 Average GR- Growth rate per year
  • 26. Table 9. Goat Industry Value of Production and Average Growth Per Year from 1998 to 2007 (In P Billion) 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 Source of Basic Data: BAS 27
  • 27. 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. 28
  • 28. Table 10. Goat Breeds Raised in Selected Private Farms in Provinces/Cities No. of Breed/s Available Region Province/City 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 29
  • 29. Table 11. Goat Breeds Raised in Selected Government Farms in Provinces/Cities No. of Breed/s Available Region Province/City 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 30
  • 30. 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. 31
  • 31. Yolly Raca’s Goat’s Milk Soap “Kalpana” Brand 32
  • 32. 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. 33
  • 33. Alaminos Boer Goat Farm with their “Milk Star” Brand of Goat’s Milk, Alaminos, Laguna 34
  • 34. Jeffrey Lim’s JSJ Farm, Tarlac 35
  • 35. 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 36
  • 36. Marketing •Role of livestock “oksyon” markets (LOMs) in goat marketing is vital. About 90%-95% of them are being used for goat trading. 37
  • 37. Table 13. Operational and Non-operational Livestock “Oksyon Market” in the Philippines, As of December 2006 No. of Accredited Livestock Markets Total Percent Share of Accredited Region 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 Source of Basic Data: BAI Some livestock auction markets in some part of the country where used as a venue to sold the goats. 38
  • 38. Table 14. Goat: Monthly Farm Gate Price, Philippines (P/kg. Live weight) FARMGATE PRICE (Live MONTH Percent Change weight) PHILIPPINES 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) The national annual average farm gate price of goat in 2005 was P65.43 per kilogram 39
  • 39. Marketing (con’t) • 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. 40
  • 40. Figure 3. Average Monthly Prices of Chevon in Metro Manila (P/Kg.) 220.00 210.00 200.00 190.00 2003 2004 (P/Kg.) 180.00 2005 170.00 2006 160.00 2007 150.00 140.00 130.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month 41
  • 41. • 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. 43
  • 42. • 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
  • 43. Jonie (father) and Jeff (son) Valencia’s Ebenezer Goat Farm, Capas, Tarlac. They are in Trading Imported Goats and Breeding Goat 45
  • 44. Figure 4. Supply-Value Chain of Goat from Pangasinan to Metro Manila P154.00/kg P120.00/kg P5.20/kg GOAT --- FARM • P28.80 P14.00/kg Provincial Trader’s Margin P188.00kg P222.00/kg •P20.00/kg P13.00 Wholesaler’s Slaughter house Margin • P21.00 Wet market’s margin Source: BAI-MDD, Esplana, Abao, Vasquez, et. al. 2008
  • 45. Competitiveness Analysis The Philippines is price competitive with United States, Canada and Australia where import parity/domestic wholesale price is greater than 1. 47
  • 46. Table 14. Competitiveness of Locally Produced Goat Meat and Imported Goat Meat In Canada, 2007 Carcasss, half- Carcasss, half- Carcasss, half- Carcasss, half- carcasses, and frozen carcasses, and frozen carcasses, and frozen carcasses, and frozen At Different Price Quotation (FOB), Tariff Price/Kilo Price/Kilo Price/Kilo Price/Kilo Rates and Same Exchange Rates at 30% in-quota tariff at 30% in-quota tariff at 35% in-quota tariff at 35% in-quota tariff (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. 48
  • 47. Table 15. Competitiveness of Locally Produced Goat Meat and Imported US Goat Meat, 2007 Carcasss, half- Carcasss, half- Carcasss, half- Carcasss, half- carcasses, and frozen carcasses, and frozen carcasses, and frozen carcasses, and frozen At Different Price Quotation (FOB), Tariff Price/Kilo Price/Kilo Price/Kilo Price/Kilo Rates and Exchange Rates at 30% in-quota tariff at 30% in-quota tariff at 35% in-quota tariff at 35% in-quota tariff (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. 49
  • 48. Table 16. Competitiveness of Locally Produced Goat Meat and Australian Imported Goat Meat, 2007 Carcasss, half- Carcasss, half- Carcasss, half- Carcasss, half- carcasses, and frozen carcasses, and frozen carcasses, and frozen carcasses, and frozen At Different Price Quotation (FOB), Tariff Price/Kilo Price/Kilo Price/Kilo Price/Kilo Rates and Exchange Rates at 30% in-quota tariff at 30% in-quota tariff at 35% in-quota tariff at 35% in-quota tariff (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. 50
  • 49. 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. 51
  • 50. 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. 52
  • 51. This material could be downloaded at http://www.smileyberks.com/cpr and http://cprstudies2038.multiply.com 53
  • 52. 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 54
  • 53. 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. 55