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Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for

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Journal of Agricultural Science and Technology A 4 (2014) 155-168
Earlier title: Journal of Agricultural Science and Technology, ISSN 1939-1250
DDAVID PUBLISHING

Livestock Feed Marketing in Ethiopia: Challenges and

Opportunities for Livestock Development

Mesfin Dejene1, 2, Seyoum Bediye2, Dawit Alemu3, Getu Kitaw2, Aemiro Kehaliw2, Getnet Assefa3 and Getaw
Tadesse4
1. QAAFI, Centre for Animal Science (CAS), the University of Queensland, Gatton QLD 4343, Australia
2. Ethiopian Institute of Agricultural Research, Holetta Research Center, Addis Ababa, Ethiopia
3. Ethiopian Institute of Agricultural Research, Addis Ababa, Ethiopia
4. International Food Policy Research Institute (IFPRI), Addis Ababa, Ethiopia

Received: December 23, 2013 / Published: February 20, 2014.

Abstract: This paper presents the feed marketing systems of Ethiopia in terms of feed demand and supply, feed quality issues, feed
prices and price trends based on qualitative data generated through rapid market appraisal methodology. The results indicate that, the
demand for roughages, agro-industrial by-products (AIBP) and compound feeds is showing increasing trend. The use of feed from
commercial sources is, however, very limited due to shortage of feed supply and inefficient marketing system. The AIBP mainly
from flour and grind mills, oil processing plants and breweries are in short supply and directly marketed to user or through traders.
Consequently, most of the exiting feed mixers/processing enterprises are operating under capacity estimated at about 20%-30%. The
main marketed roughages, which are mainly cereal straws and baled hay, are also in short supply. Feed prices are increasing from
time to time and mainly exacerbated by the increasing trend in export market of AIBP and double taxation in mixed rations. There is
no any feed quality control or assurance mechanism in Ethiopia. Precaution needs to be taken in the area of taxation in order to avoid
double taxation. Implications to improve the feed marketing systems and opportunities for livestock development are drawn.

Key words: Agro-industries, by-products, concentrate mixtures, crop residues, quality control, taxation.

1. Introduction food security and poverty reduction is expected to

increase substantially because of increases in standard
Subsistence livestock production constitutes a very
of life and urbanization in developing countries.
important component of the country’s agricultural
Despite its contribution to the economy and small
economy accounting for 16% of the total GDP and over
holders’ livelihood, the production system is not
40% of the agricultural GDP [1], 15% of export
adequately market-oriented and livestock productivity
earnings and generates 30% of the agricultural
remains very low due to various constraints that include
employment [2]. Moreover, livestock are estimated to
poor nutrition and disease prevalence. These problems
contribute to the livelihoods of 60%-70% of the
are compounded by inefficiencies in the input (feed,
Ethiopian population. More interestingly, the livelihood
genetic material and veterinary services) and output
of pastoralists is dependent on livestock. Pastoral areas
(livestock and livestock products) marketing, including
cover 60% of Ethiopia and include 12%-15% of the
poor market infrastructure, lack of marketing support
human population, as well as very large number of
services and limited market information [4]. Among
livestock [3]. The major contribution of livestock to
these constraints issues related to feed are the most
Corresponding author: Mesfin Dejene, Ph.D. candidate, remarkable ones. Feed shortage in quantity and quality
research field: agriculture (animal nutrition). E-mail: has been a critical problem in Ethiopian livestock
[email protected]; [email protected].
156 Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for Livestock Development

production system [4-6]. The single largest expense in South West Shewa (Alemgena, Sebeta, Tulubolo and
animal production is feed cost and it dictates feasibility Weliso), East Shewa (Dukem, Bishoftu, Mojo and
of livestock enterprise. Overall, among the dominant Adama) and Addis Ababa and surroundings were
factors contributing to the feed shortage both in terms selected as main sites of investigation and sources of
of quantity and quality is the poor feed marketing information of marketing operations.
system characterized by poor market information, The study is based on qualitative information such as
localized thin markets and limited premium price for feed supply and demand aspects, feed quality issues,
quality. challenges and opportunities of feed marketing sourced
A review of past research works indicated that through group discussions and interviews with key
animal feeds and nutrition research largely informants (hay producers, millers and feed processors,
concentrated on biological aspects both on-station and small and large scale agro-industries, feed traders, feed
on-farm. If adoptions of animal nutrition technologies buyers and cattle traders). Data were also collected
have to be optimized on the on-farm, feed technology based on interviews with key informants (experts of the
development should be accompanied by efficient feed respective Woreda Offices of Agriculture and Rural
market system. An efficient feed marketing system is Development and Development Agents, experts of the
rewarding both for marketing agents and livestock Respective Woreda/Urban Offices of Trade, industry
producers. So far, very few studies have addressed and transport, experts at the Ministry of Agriculture and
issues of feed supply and marketing [4]. However, Rural Development (MoARD), Ministry of Trade and
information concerning livestock feed demand and Industry, Bureau of Trade & Industry (Addis Ababa),
supply, feed quality issues, feed marketing, feed prices, Zonal Offices of Agriculture and Rural Development
price trends are scarce. This paper is aimed at and experts of the Urban Agriculture Offices).
assessing the feed marketing systems in Ethiopia in In addition to this, data generated through personal
general and in the Central Ethiopia in particular, to observations through field visits (feed market places,
analyze and generate a qualitative understanding of livestock farms, small and large scale agro-industries
(edible oil factories, floor factories and millers) and
the feed demand and supply situations, feed quality
feed processing industries) were considered. Data on
issues, feed marketing, feed prices and price trends.
feed prices and price trends, type and amount of feed
This paper is organized as follows: The next section
exported were collected from secondary sources
presents the methodology used in the study. Section
(records of federal, zonal and district level, Ethiopian
three presents results and discussion on domestic
Customs Authority, Addis Ababa Chamber of
livestock feed supply and demand, export demand of
Commerce, traders, small and large-scale
livestock feeds, domestic livestock feed marketing and
agro-industries and feed millers and mixers/processing
prices, feed quality and government policy issues.
enterprises).
Section four concludes the paper and presents
implications. 3. Results and Discussion

2. Materials and Methods 3.1 Domestic Livestock Feed Supply

This study was conducted based on Rapid Market 3.1.1 Types of Livestock Feed Supplied in
Appraisal (RMA) methodology [7, 8]. As key Domestic Market
marketing reference points different markets in North In general, the feed markets can be categorized into
Shewa (Sululta, Chancho, Fitche and Gerba Guracha), three main market types: markets for roughages,
West Shewa (Holetta, Addis Alem, Ginchi and Ambo), markets for agro-industrial by-products (AIBP) and
 Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for Livestock Development 157

markets for compound feeds/concentrate (CSC), linseed cake (LSC) and rapeseed (Brassica
mixtures/formulated rations. carinta) or Ethiopian mustard cake (RSC), groundnut,
3.1.1.1 Roughages (Crop Residues and Natural sesame, sunflower, peanut, safflower cakes, etc.,
Pasture Hay) molasses and spent brewery grain. The traditional
The types of crop residues in the country differ brewery residue (Tela atella) and/or traditional liquor
from place to place depending on the type of crop residue (Katicala/Areqe atella) are also the
grown as determined by the agro-climatic conditions. by-products produced by small scale brewery and
The major crop residues supplied in the market are liquor plants, respectively. The major producers of
cereal crop residues like teff straw, barley/wheat straw, wheat by-products are flour mills. Wheat bran is the
green maize fodder, sorghum stover and oat (Avena most common by-product marketed and used for
sativa) fodder. However, there is a limited supply of livestock feeding. According to Tolera [6], there are
pulse crop residues. The area of grazing land has about nine state and 181 private owned grains milling
declined markedly particularly in the highlands, and factories in the country with operating capacity of
this trend is continuing at an increasing rate due to 73% and 55%, respectively, mainly producing wheat
expansion of crop cultivation and urbanization, and to by-products (Table 1).
a lesser extent through land degradation [9]. Hence, Oil crop by-products are produced mainly by large
the supply of natural pasture hay is diminishing while (Table 2) and small scale edible oil processing
crop residues are becoming increasingly important in factories. The types and the importance of the
the annual feeding cycle, already accounting for more particular seed cakes in the country vary from place to
than 50% of total feed in most areas. Sugarcane tops place. In west, South West and North Shewa zones,
and bagasse are mainly produced by the state sugar the seeds cakes traded are noug and linseed cakes. In
factories. However, because of its bulky nature and Adama town, cottonseed, linseed and nougseed cakes
difficulty to transport, most of the sugar cane tops are are most supplied.
either burned or left in the field and used freely by any Most of the large-scale edible oil factories are
livestock producers living in the vicinity of the operating at less than 50% of their capacity due to
factories. fluctuation and inadequate supply of raw materials
3.1.1.2 AIBP (oilseeds) because of competition with export and
The major feed resources as by-products of the direct use of the seeds locally, high price of oilseeds,
agro-industries in the country are milling by-products availability of cheaper imported oil in the local market
(wheat bran (the coarse outer coat of wheat), wheat and climatic factors.
middling (finer which may contain bran, endosperm According to administrative zone/town/district
and germ), wheat short, rice bran and screenings), trade, industry and transport office and/or district
edible oil processing by-products such as nougseed finance office and bureau of trade and industry (Addis
(Guizotia abyssinica) cake (NSC), cottonseed cake Ababa), the number of small scale oil processing plants
Table 1 Total quantity sold of wheat bran (WB) and wheat middling (WM) from private and state owned food industries
used as animal feed, during 2003/04-2006/07.
Type of Total quantity (quintals) sold
Name of agro-industry
by-product 2003/04 2004/05 2005/06 2006/07
DH-GEDA Floor Factory WB NA 19,798.5 15,356.5 15,295.5
WB 23,829.7 25,374.2 14,591.4 13,969.5
Kaliti Food Share Company
WM 16,513.0 15,441.7 9,522.4 11089.8
Source: DH-GEDA Floor Factory (AA) and Kaliti Food Share Company; NA: not available.
158 Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for Livestock Development

Table 2 Annual production* (total quantity sold) of different oilseed cakes used as animal feed, during 2003/04-2006/07.
Type of Total quantity (quintals) sold
Name of agro-industry
by-product 2003/04 2004/05 2005/06 2006/07
Addis-Modjo Edible Oil Complex Share
CSC/Meal NA 11,588.86 10,486.40 14,395.00
Company
NSC/Meal NA NA 3,702.29 364.50
RSC/Meal NA 5,102.41 13,280.19 15,633.82
Total 16,691.27 27,468.88 30,393.32
Nazareth Edible Oil Complex Share
CSC NA 21,364.90 25,044.20 35,204.30
Company (Adama)
Hamaressa edible oil (Harar)* Peanut cake 3,470 2,090 2,380 NA
Bahir Dar edible oil (Bahir Dar)* Oilseed cake 2,290 1,110 2,660 NA
Source: large scale edible oil factories and *compiled from Ref. [6]; NA: not available.

available in nine districts of West Shewa, six districts Goerge, Bedele, Harar and Dashen brewery factories.
of North Shewa and two districts of South West It is an excellent source of protein and a good source
Shewa zone, and in Addis Ababa, Bishoftu and of energy, and is highly palatable and can be used in a
Adama are 42, 16, 4, 46, 2 and 39, respectively. variety of rations. In 2006/07, annual production of St.
According to the small-scale edible oil processing George brewery, Bedele brewery and Harar brewery
plant owners at Kuyu District (North Shewa zone), were 1,200 MT, 88,000 HL and 53,365 MT spent
depending upon the efficiency, an oil processing plant grain, respectively. In the same year, Bedele brewery
can process up to 4 quintals of noug seed and produce also produced 20,000 HL brewer’s yeast in addition to
96-100 L of oil and 2 quintals of NSC per day. spent grain while Awash Winery produced 100 MT of
However, one should note that it was not easy to get by-product [6]. Breweries offer this by-product only
and/or estimate information on the amount of oilseed in the wet form (70%-80% moisture), therefore
cakes produced and the level of production transportation costs are high. Unless stored in trench
performance of their plant by most privately owned or bunker silos, the shelf life of brewer’s grain is
small-scale oil processing plants located in various limited to 3-4 d, depending on the environmental
parts of the country, presumably for concerns related temperature. The storage and cost of handling usually
with taxes. also limit the use of brewer’s rain. Consequently,
Molasses is mainly produced by the state sugar some breweries like Meta Abo Brewery Share
factories namely Wonji-Shewa, Metehara and Finchaa Company (MABSC) sell spent grain as by-product
sugar factories (Table 3). It is the cheap source of only around their production areas (Table 4).
soluble carbohydrate for livestock, and is highly The majority of food industry surveyed did not
palatable and used for flavor and control of dust in have a strategic plan to handle their by-products that
ration. However, because of the competing alternative can be utilized for animal production. Among the
use (ethanol production), increasing trend in export by-products that are not properly marketed and can be
market and its bulky nature and difficulty of transport, used for ruminant production are: brewers grains,
the amount of molasses used as animal feed is quite brewers yeast, tomato pomace, grape pomace,
insignificant and is not properly marketed in the sugarcane tops, bagasse, pasta waste, wheat short and
country. Currently, the molasses produced from wheat screenings. The use of molasses is also very
Finchaa Sugar Factory is used for ethanol production limited due to supply shortage mainly associated with
[6]. domestic marketing problem and this problem becomes
Spent brewery grain is produced from Meta, St. more serious in distant places from its production areas.
 Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for Livestock Development 159

Table 3 Annual productions of molasses from sugar factories, during 2003/04-2006/07.

Total Quantity (MT)
Name of agro-industry Type of by-product
2003/04 2004/05 2005/06 2006/07
Metehara Molasses 35,749 37,727 41,343 41,455
Wonji-Shewa Molasses 18,754 18,386 17,901 17,579
Finch’a Molasses NA 22,225 21,607 24,376
Source: Ethiopian Sugar Development Agency; Ref. [6]; NA: not available.

Table 4 Total quantity sold (in dry matter basis) of brewers spent grain from MABSC, during 2004/05-2009/10.
Total quantity sold in MT
Name of agro-industry Type of by-product
2004/05 2005/06 2006/07 2008/09 2009/10
MABSC Spent grain 2,138.40 2,317.70 2,981.90 1,923.50 1,899.70
Source: Meta Abo Brewery Share Company (MABSC), Sebeta.

Dairy producers at Kuyu District reported that the buy small quantities ranging from 1 to 5 quintals per
supply of AIBP such as wheat bran, oilseed cakes and purchase; (2) participation in auctions to deliver to
molasses are lower than the demand at prevailing intensive private as well as government livestock
price, and most of the time they are unavailable. farms and for relief purposes; (3) supplying compound
However, it should be mentioned that in most of the feed based on orders which is commonly practiced by
potential peri-urban and urban areas of the country, NGOs that promote livestock production.
there is availability problem. The status of feed supply Most feed mills complain about unavailability and
in the country is at an alarming state where the supply price rise of raw materials (AIBP), fluctuation of raw
shortage problem is not limited to only the shortage of materials supply both in quantity and quality and price
own produced feed or naturally available feed such as with season. Better quality raw material is available at
from grazing lands, but also the unavailability of feed crop harvest and vise-versa. Recently, they are facing
supply for those who can afford to buy [10]. This has a lack of raw material such as soybean in the local
a direct implication in the promotion of livestock market used to formulate poultry ration. Former
production especially in urban and peri-urban areas private big clients of some of these feed mills decided
where there is huge investment in livestock production to run their own feed mixing operations, competing in
(dairying, fattening and poultry). the procurement of raw materials. Experts’ estimates
3.1.1.3 Compound Feeds (Formulated Rations) suggest that only about 25% of the AIBP are
Among the 15 feed mixers and millers found in the converted into compound feeds that are formulated to
country [4], eight of them are found along the Addis give the required nutritional composition for the
Ababa Adama corridor engaged in compound feed different types of animals and the rest 75% is used
production using purchased grains, AIBP and directly to feed animals. Consequently, most of the
imported vitamins and minerals. Usually, these exiting feed processing enterprises are operating under
enterprises secure the purchase of inputs through capacity estimated at about 20%-30%. Moreover, they
participation in auctions of flour mills. They sell the are not technically updated. Equipment used is old and
compound feeds directly to users; no traders are rudimentary. Lack of skilled man power, modern
involved in the sell of compound feeds. The current facilities and technology also has an impact on the
market channels for compound feeds are characterized efficiency on the enterprises. Feed millers are not
by (1) the direct sale to individual purchasers regulated in terms of feed tag quality or compliance.
(livestock owners including equines), who normally They can mix anything and do not have to include a
160 Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for Livestock Development

tag. Feed millers and mixers do not have advanced energy supplement to low quality crop residues and
technology for storage, grinding, mixing, mix hays. AIBP principally bran, molasses and oil seed
formulation or quality control laboratories. Lack of cakes have greatly increased in value. They are
premium price for quality products due to lack of primarily used within fattening and dairying programs
quality standards is also limiting their supply. The use [9]. In general, the demand of the AIBP is lower
of food-by-products by feed millers is limited to the during the wet season (July to September) due to the
most traditional by-products such as wheat bran, CSC green fodder availability and the low fattening
or meal and NSC and a limited extent RSC. For activities during the season. The AIBP are directly
ruminant diets they do not include trace minerals or marketed to user or through traders who buy in large
vitamin supplements. quantities for the purpose of retailing and making
available in small quantities as animal feed. The
3.2 Domestic Livestock Feed Demand
customers are mainly small-scale dairy and fattening
3.2.1 Demand for Roughages (Crop Residues and farms in urban and peri-urban areas as well as urban
Natural Pasture Hay) equine owners (horse cart and donkey owners), where
In recent years, the market for roughages is the agro-industries are found. For instance, dairy
booming due to the continuous reduction of grazing producers in urban areas of the southern part of the
area and also expansion of commercial farms mainly country (Hawassa, Yirgalem and Dilla) use mainly
in urban and peri-urban areas. The main roughages purchased roughage and AIBP along with
marketed are cereal straws and baled hay. The trade non-conventional feeds like “attella” and also hay
for baled hay is mainly dominated by commercial stacking especially during dry period [11]. However,
livestock farms, which follow two types of marketing the marketing of brewery by-products both from
practices: the first is a marketing practice where commercial breweries (brewery grain) and home
commercial livestock farms contact in pasture lands, making breweries (Tella Atella) and liquor (Areke
harvest and bale and use for their own farm and sell Atella) is limited only around the production areas due
the surplus to other livestock farms; the second to the transport problem associated with the bulky
practice is the purchase of dry hay by commercial nature of these by-products.
farms from small-scale farmers who produce hay on 3.2.3 Demand for Compound Feeds
small-scale bases on pasture lands. There is an The markets for the different compound feeds are
increasing trend in market for straws and stover, concentrated along the stated corridor, where the feed
particularly in areas adjacent to dairy and fattening processing enterprises and intensive and
programs. Recently, baled crop residues such as teff semi-intensive livestock farms (dairy, cattle fattening,
and barley/wheat straw are traded in some urban areas poultry and pig) are found. Feed millers complain that
(Addis Ababa and Adama). However, the alternate use private livestock producers do not use their products
of crop residues such as teff straw for house for the following reasons: high price per quintal, lack
construction and teff, barley and wheat straws for of trust on their product (lack of animal performance),
mattress making has made much contribution for the lack of awareness/knowledge about the existence of
scarcity of the roughages for livestock feed. Basically complete manufactured animal feeds and the majority
the roughage feed market is informal. of livestock producers in the country are subsistence
3.2.2 Demand for AIBP and not market-oriented. They stated that the price rise
Oilseed cakes are used as a protein supplement of compound feeds is associated with the general
whereas the by-products from floor mills used as an increase in food prices coupled with lack of tax
 Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for Livestock Development 161

exemptions on raw materials (AIBP) and double 39.75%) followed by crop residues/hay (18.76% and
taxation on their products. Consequently, most of the 29.59%), oil seed cakes (12.80% and 25.05%), brans
urban and peri-urban livestock producers decided to (4.867% and 5.59%) and compound feeds (0.003%
run their own feed mixing operations and resulted in and 0.015%), respectively (Fig. 1). All types of feed
diminishing of compound feed market. However, they are mostly exported to Djibouti and Arabian
do not make efforts to create their markets through Peninsulas. Recently in 2009 and 2010, a significant
better services and technical assistance or advertising. amount of oil seed cakes mainly RSC are exported to
On the other hand, low purchasing power of the China followed by Sudan, Vietnam and Singapore
smallholder/subsistence farmers due to lack of market while brans are exported to Somalia. In all types of
oriented livestock production system resulted in a feeds except compound feeds the volume of export
great impact on the potential market of compound market is increasing since 1997. Even though there is
feeds. The total demand of compound animal feed is export ban of animal feeds in this country since 2009,
low. Furthermore, there is low demand of compound there is still an increasing trend in export market of
feeds during fasting time. As a result, the current low oilseed cakes (RSC) followed by brans, crop
demand for compound feeds have either gave residues/hay and molasses from January to June, 2010
incentive for most of the feed processing enterprises to (Fig. 1).
practice vertical integration, i.e., engagement in AIBP are inputs for feed processing enterprises.
modern livestock production (fattening, dairy, poultry However, a large volume of these feed ingredients are
and/or pig farming), or they are forced to sale their being exported without any value addition and
respective products either with minimum profit resulted in a supply shortage for domestic market. The
margin or sale a product having inferior quality at low trend in the FOB value (in Ethiopian Birr) of total
price. feed exported from Ethiopia shows that there is huge
increase in 2004, 2007 and 2010 as compared to the
3.3 Export Demand of Livestock Feeds
previous years even though there was a fluctuation
The export data from the year 1997-2010 indicates from year to year since 1997 (Fig. 2).
that among the exported livestock feed types, in terms
3.4 Domestic Livestock Feed Marketing and Prices
of volume and free on board (FOB) value, the highest
export market share goes to molasses (63.57% and The feed market types and marketing practices are

42500
40000
Amount of Feed Eported (Tons)

37500
Crop residues/Hay
35000
32500 Molasses
30000
Brans
27500
25000 Oilseed Cakes
22500
20000
17500
15000
12500
10000
7500
5000
2500
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 June,
2010
Year

Fig. 1 Amount of animal feeds (t) exported during 1997-June, 2010.

Source: Ethiopia Custom Authority and Addis Ababa Chamber of Commerce.
162 Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for Livestock Development

Total FOB_Value (Millions Birr) of

32
30
All Livestck Feed Exported
28 Total FOB Value in Millions Birr
26
24
22
20
18
16
14
12
10
8
6
4
2
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 June,
2010

Year
Fig. 2 Trends in the FOB value (Birr) of total feed exported from Ethiopia since 1997-June, 2010.
Source: Ethiopia Custom Authority and Addis Ababa Chamber of Commerce.
1USD ≈ 9.9 Birr.

different depending upon the livestock production (Table 5). In 2009/10 the price of teff straw ranges from
system along with the types of feed. Similarly, the 0.8 Birr/kg to 2.5 Birr/kg, which is mainly the
markets for urban, peri-urban and rural areas vary reflection of the multipurpose use of teff straw as
considerably. In urban and peri-urban areas where animal feed also as input for construction. The price of
there is intensive and semi-intensive livestock baled hay ranges from 0.7 Birr/kg to 2.0 Birr/kg, which
production in the form of dairying, ruminant fattening, is the reflection of location variability. Moreover, the
poultry and pig, relatively, there is considerable price of hay varies with the quality. The higher the
market for compound feeds, AIBP and also for quality, the better will be its price.
roughages mainly for baled hay and straw. In rural 3.4.2 Price and Price Trends of AIBP
areas where there is a mixed crop-livestock production The prices of the different by-products have been
system, majority of the livestock producers use feeds consistently rising from time to time. Though the
from their own farms. For instance, about 54% of highest price increment of the AIBP was observed in
dairy producers in southern part of the country use 2007/08, the price for NSC has increased from 54
solely feeds from their own farms and about 24% use Birr/quintal in 2003/04 to 185 Birr/quintals in
both feed from their own farms and communal grazing 2009/10. Similarly, the price of wheat bran has
[11]. On the other hand, in the pastoral production increased from 52 Birr/quintal in 2003/04 to 140
system, the source of feed is mainly free grazing Birr/quintal in 2009/10 (Fig. 3). The price of all
without as such market for any type of feed. AIBP showed a slight decrease in price during
3.4.1 Price and Price Trends of Roughages (Crop 2008/09 due to the government intervention in
Residues/Hay) importing wheat grain and exemption of tax in
Following the general price increase in the economy, consumable products. However, the price of AIBP is
roughage prices have also risen sharply in recent years. still rising in 2009/10. The increasing price trend is
In general, roughage prices tend to be higher during the associated with the overall price increase in
dry and wet seasons and lower during harvesting season. agricultural products and also increased demand for
Similarly, there is considerable variability in prices these by-products following the expansion of
among different areas in the country, which is reflected commercial livestock farming mainly in urban and
in the price ranges for the different types of straw peri-urban areas.
 Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for Livestock Development 163

Table 5 Price ranges for different roughage feeds in 2008 and 2009/10.
Feed type Price range ($Birr/kg), 2008* Price range ($Birr/kg), 2009/10#
Teff (Eragrostis tef) straw 0.50-1.70 0.8-2.5
Barley/wheat straw 0.25-1.00 0.4-1.2
Sorghum stover 0.20-0.65 -
Loose natural pasture hay 0.30-1.00 0.5-1.4
Baled natural pasture hay 0.50-1.66 0.7-2.0
Green oat (Avena sativa) fodder (N. Shewa) 0.50-0.80 0.8-1.40
Source: *Ref. [4]; #field survey result in towns (open and farm gate markets).
1USD ≈ 9.9 Birr.

Fig. 3 Trends in the prices of AIBP (Birr/quintal) during 2003/04 to 2009/10.

Source: Addis-Mojo Edible Oil Complex Share Company (AMEOSC), Nazareth Edible Oil Factory, Ethiopian Feed Industry
Association, Ethiopian Sugar Development Agency (Addis Ababa) and Farmers.
1USD ≈ 9.9 Birr.

Among the oil seed cakes, LSC is the most Birr/quintal) compared to the price of solvent
expensive followed by CSC and in contrary RSC is extracted CSC (215 Birr/quintal). Moreover, in
the cheapest of all; this is due to its less demand as a 2007/08 expeller extracted RSC is also expensive (160
result of its high anti-nutritional (glucosinolates Birr/quintal) than the price of solvent extracted RSC
(GSLs)) contents. The use of RSC/meal within (35 Birr/quintal) which is in agreement with Ref. [12]
compound feeds is also usually restricted by the indicated that oil extraction process affects the total
presence of these endogenous anti-nutritional factors GSL (μmol/g) content of the meals because of varying
or anti-nutrients. oil extraction conditions. Solvent-extracted meals
GSLs are known for a long time to reduce the contain higher amount of GLS than that in dehulled
intake, induce iodine deficiency, hypertrophy of liver, extracted meals. Expeller extracted rape seed meal
kidney and thyroid and at higher levels mortality. contains less GLS content than in solvent extracted
Deleterious effects of GLSs are greater in meal.
non-ruminant animals compared to ruminants [12]. In Along with other by-products, the price of molasses
2009/10 the price record of AMEOSC indicates that is also increasing from time to time. The factory price
expeller extracted CSC is more expensive (265 of molasses has increased from 4.56 Birr/quintal in
164 Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for Livestock Development

2003/04 to 54.05 Birr/quintal in 2009/10. However, year since 2003/04 (Fig. 5) due to the increasingly
the trend for molasses is a bit different from the rest of supply shortage and price hike of the inputs such as
AIBP in that it did not show a decrease in price during AIBP.
2008/09. This may imply that molasses price is Price set of compound feeds is determined by cost
triggered by some other factors rather than the general of production plus profit and value added tax. The
food price increase in the country. As indicated in Fig. seven years (2003/04 to 2009/10) average price data
1, molasses is one of the highly exported animal feeds show that poultry rations (starter ration followed by
during 2007 and 2008. Taking the use of molasses as a layers and growers ration) have the highest
feedstock for production of bio-fuel into consideration, price/quintal followed by dairy, calves, sheep, heifers,
the demand is expected to increase and will result beef and bull ration (Fig. 6). This is due the difference
even in more price increase. However, the factory gate in input price of the ingredients used for formulation
price (in dry matter basis) of spent grain at Meta Abo of ration. Vitamin premix and lysine are imported
Brewery Share Company remains the same (5.6 ingredients used for poultry ration and this makes
Birr/quintal) for the year 2004/05 to 2006/07 with a poultry ration expensive compared to other livestock
slight increase (6.4 Birr/quintal) in 2008/09 and ration.
2009/10; this might be due to its limited utilization In general, prices of most feed types are increasing
only around production areas associated with its bulky over time. The reasons of such price change are
nature, high transportation cost and limited shelf life. related to changes in domestic and demand, domestic
The average (2004/05 to 2009/10) monthly price of supply shortage and policy related issues.
wheat bran has shown seasonality in a year where the 3.4.4 Effects of Feed Price Rise
price increases in the months from March to June as Due to the continuous rise in feed prices relative to
compared to other months (Fig. 4). This trend is the price of milk and milk products, most of urban and
mainly due to higher demand in the early months of per-urban dairy farmers have either obliged to destock
the rainy season. their dairy cows or decided to maintain their animals
3.4.3 Price and Price Trends of Compound Feeds by underfeeding for some period of time which
(Formulated Rations) resulted in a sharp reduction in animal productivity
The trend in the prices shows that there is huge and would affect the lifetime productivity of dairy
increase in 2007/08 as compared to the previous years cows. Moreover, most of the feed processing
even though there was a gradual increase from year to industries were operating far below their potential

Fig. 4 Seasonality of wheat bran price (factory gate) at Addis Ababa during 2004/05 to 2009/10.
Source: DH-GEDA Floor Factory, Addis Ababa.
1USD ≈ 9.9 Birr.
 Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for Livestock Development 165

450
2003/04
Price in Birr/quintal

400
350 2004/05
300
250 2005/06
200 2006/07
150
100 2007/08
50 2008/09
0
2009/10
Dairy Heifers Calves Beef Bulls Sheep Layers Growers Starter Pig
cow

Type of Livestock Ration

Fig. 5 Trends in prices of compound feeds for different classes and types of livestock (2003/04-2009/10).
Source: Kaliti Feed Processing Enterprise and Ethiopian Feed Industry Association.
1USD ≈ 9.9 Birr.

300

Price (Birr/quintal)
250
PriceinBirr/quintal

200

150

100

50

0
Dairy Heifers Calves Beef Bulls Sheep Layers Growers Starter Pig
cow
Type of Livestock Ration

Fig. 6 Average prices of compound feeds for different classes and types of livestock from the year 2003/04 to 2009/10.
Source: Kaliti Feed Processing Enterprise and Ethiopian Feed Industry Association.
1USD ≈ 9.9 Birr.

which might lead them on the verge of collapse due to consideration with minimum possible cost. Therefore,
the continuous input price rise coupled with the quality of feed considers the nutrient requirement
unavailability of raw materials at prevailing price and of the livestock under consideration and the nutritive
low demand for compound feeds. This has to be value of feed ingredients available. Determination of
reversed in order to make these industries inline with these parameters avoids under or overfeeding of
the current government development and nutrients. Underfeeding can cause impaired
transformation plan. performance of animals whereas over feeding would
increase feed cost. Cognizant of the need to ensure
3.5 Feed Quality Issues
feed quality, different manuals were prepared for
The feed quality issue is related with fulfillment of practitioners [13-15].
the nutritional requirements of the livestock under Even though, the market for the different feed type
166 Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for Livestock Development

is increasing from time to time, there is not any feed coupled with unregulated export market of AIBP has
quality control and assurance mechanism in Ethiopia inflated compound feed prices in an unprecedented
[6]. Most of the dairy, fattening and poultry farms use rate.
their own feed formulation due to the limited number
4. Conclusions
of feed processing companies, lacking of awareness
and the increasing trend in prices of compound feeds. The market transactions for roughages, AIBP and
Moreover, some livestock farms that buy compound compound feeds is showing increasing trend, even
feed complain about the quality mainly related with though its size is still small considering the livestock
the poor nutritional composition. This has created population the country. Crop residues such as teff
mistrust among actors in the industry further thinning straw, barley and wheat straw and natural pasture hay
the compound feed market, which needs to be are the most marketable roughage feed in the study
addressed through implementation of vibrant public area and used as a basal diet for livestock. Natural
quality and standard enforcement mechanism. pasture areas are declining overtime due to the
expansion of crop cultivation and urbanization. Crop
3.6 Government Policy Issues
residues and natural pasture hay are also exported to
The ineffectiveness of the export ban and excessive Djibouti and Arabian Peninsula. Hence, in most of the
value added tax are the two most important policy study areas there is an acute shortage of natural
issues that trigger the persistence of high animal feed pasture hay supply in domestic market at prevailing
prices. Following the increasing trend in feed prices prices.
over the years, recently Ethiopian feed industry The most commonly marketed AIBP in the study
association was established with the objective to solve area are noug, linseed, cotton seed cakes, wheat bran
the problem associated with markets for compound and to limited extent molasses and RSC. The export
feeds. Moreover, the association requested the market of AIPB has made a contribution for the
government to intervene on the increasing trend of shortage of AIBP and increased their prices in the
feed export market especially on non-value added feed domestic market. The AIBP which are used as raw
types such as AIBP and crop residues/hay and on the material for compound feeds are not tax exempted and
taxation. Consequently, the government has banned there is also double taxation in the
feed export market. However, our study indicates that formulated/compound ration. As a result, prices of
still there is feed export market. This might be compound feeds are also rising sharply.
associated with lack of equal play field in the export In general, commercial feed supply is emerging in
market, transparency and awareness among all the urban and peri-urban parts of the study areas. The use
stakeholders who are implementing the policy. of feed from commercial sources is, however, very
Moreover, we have observed that while value added limited due to shortage of feed supply and inefficient
tax is exempted for most food crops, AIBP (inputs for marketing system and this problem become more
feed processing enterprises) were not exempted and serious in rural areas. In most of the potential
consequently there is also double taxation in peri-urban and urban areas of the country there is feed
formulated (compound) feeds. So long as the availability problem. Moreover, there is a variety of
objective of tax exemption is to reduce the consumers by-products that are available for livestock feeding,
food cost, animal feed would have been exempted but not all properly marketed and utilized. This may
since feed cost usually accounts for 60%-70% of the be due, in part, to ignorance about availability and/or
total livestock production costs. Such double taxation suitability for use in animal nutrition. Therefore, there
 Livestock Feed Marketing in Ethiopia: Challenges and Opportunities for Livestock Development 167

is an opportunity to use these by-products in a national farming as well as to the smallholder

way in order to increase profitability, and improve semi-commercialized livestock keepers. Therefore, (1)
animal nutrition and performance. Hence, there is a the public support in terms of agricultural extension,
need for interventions to develop feed markets in credit and infrastructures needs to be strengthened to
Ethiopia. Based upon this, we draw the following support the sector mainly in urban and peri-urban
implications. areas in order to well link the feed sector with modern
In order to promote livestock production, the feed livestock production; (2) in order to increase demand
production and marketing aspect need to get due for compound feeds for improved efficiency of the
attention. Interventions to increase the feed supply, existing feed processing industries, different
improving ration formulations both in the nutritional marketing strategies should be promoted like mini
and economic area and developing feeding strategy package of compound feeds, demonstration of the use
based on locally available feed resources are urgently of compound feeds to users, awareness creation
needed which could vary depending on the resource through advertisement and training of livestock
base of a particular intervention area. Moreover, ways producers, and implementation of vibrant public
should be devised for the better conservation, quality and standard enforcement mechanism, linking
utilization and marketing of underutilized alternative cooperatives with feed supply, etc.; (3) investment
(non-conventional) feed resources produced as promotion in animal feeds need to be promoted for
by-products from cannery, vegetable, fruit wastes, increased competition in the feed markets; (4) there
tomato pomace and grape wastes, sugarcane tops and should be strict ban of export market on non-value
bagasse from sugar factories, brewers grains and added feed ingredients while up-grading the capacity
brewers yeasts from brewery factories etc.. of feed processing industries to compete in domestic
Livestock production in Ethiopia should be as well as in international markets; (5) improving the
commercialized (market-oriented) and feed marketing transparency of market operations including
aspects have to receive at most focus and attention. In government policies by providing equal access to all
order to achieve commercialized livestock production participants; (6) the cost items related with value
system, an enabling environment including strategic added tax indicate a need for targeted policy and
policy in livestock feed marketing is the most development intervention since they have big impact
important aspect that needs to be addressed and on the competitiveness of compound feeds in
implemented in a value-chain approach. On the other domestic as well as export market through inflated
hand, unless there is a wider investment in the sector domestic cost of production. Thus, it needs critical
mainly in modern/commercialized livestock farming policy decision to avoid double taxation.
(dairy, fattening, poultry etc.), the demand for The quantitative analysis of the existing livestock
compound feed will remain low. Thus, it is important feed market (Domestic vs. Export) in a holistic system
that there is a planned promotion of modern livestock approach warrants further research, because feed cost
farming where the existing resources mainly the feed is the major factor that dictates the feasibility of
resource are utilized efficiently. On top of this, there is livestock production in Ethiopia.
also an opportunity for private sectors to enter into the
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