I had hoped to be able to report a superb year for the ostrich industry worldwide since my last report. September 2015 saw South Africa back in business exporting fresh meat to Europe and the hopes were that with a substantial quantity of meat available again after 4 lean years that markets could be rebuilt and growth of the industry reinvigorated. However, that has not been the case!

It is now obvious that the Klein Karoo (KK) have decided to scale down the size of their operation and are determined to keep ostrich as a niche product which will hopefully command high prices for skins and leather. They now operate a quota system for producers in South Africa and many who do not have quota have been left with lots of birds on their hands and no market. This has resulted in a number of farmers going out of business and others struggling to find a market.  Even those who have quota are being paid the absolute minimum to keep them in business enabling export prices to the EU for the meat to be reduced to make it uneconomic for farmers in the EU to compete. This is an obvious attempt to reduce overseas competition and shrink the industry to the perceived optimum size for the KK.

The US is also struggling although here the problem is rather different. Demand for product is good but there is now simply insufficient product to meet the demand. The producers that remain are widely dispersed across the continent which makes it difficult to co-operate in joint marketing ventures and to access the larger retail outlets. Most producers just sell locally through farmers markets etc. Not many countries are able to export ostrich to the US at present to enable this demand to be satisfied.

There are still some bright spots. Iran is producing a lot of birds and has no difficulty selling the meat in country without having to develop export markets. The only reasonably sized producer in Australia also has no problem selling his meat for good returns. Pakistan is also very active but most producers there are very small so have difficulty accessing export markets.  There is also growing activity in many eastern European states that were former members of the Soviet Union.

The leather market is still not particularly buoyant with prices for green skins remaining depressed. Unfortunately, leather is subject to the vagaries of the fashion market and ostrich leather is still not finding favour with most of the main leather users. The reasons for this is the extreme variability in quality and size. The quality is determined by the feed and management and very few producers are using top quality feeds with adequate levels of vitamins and minerals etc. to ensure the scratch resistance and elasticity required. Also a Grade A green skin needs to be a minimum of 16 sq. ft. or approximately 1.5 sq. meters and birds of less than 95kgs (210 lbs) live weight at slaughter will rarely produce this minimum size.

The directors are pleased to welcome Vivian Diaconescu from Romania to the board of directors. Vivian is the owner of the Carpathian Ostrich Alliance, a company based in Romania building an alliance of farmers working to defined standards, to enable consistency in meat and skin quality whilst retaining competitive pricing.  Vivian brings experience from the business world to support those with a more technical background. Operating in a collaborative manner enables generation of consistency and building volume to enable the economies of scale required to become competitive.