SHW 3001 PRINCIPLES OF LIVESTOCK PRODUCTION BEEF CATTLE PRODUCTION: SWOT ANALYSIS By: Wan Ahmad Ahmad Farhan bin Wan Ahmad Shabri Zainuddin (180123) …….
Fan Jia Quan (183558
Lecturer: Dr. Iswan Budy bin Suyub
INTRODUCTION AND PROBLEMS
STRENGTHS
Secure, established markets The market for local beef has always been present, with demands for consumption, besides being used in food industries for meat based products such as Ramly Burger. High demand for fresh local beef There is a high demand for locally produced beef as the locals prefer meat that is fresh, compared to those which are chilled or frozen. Some people also prefer the taste of local beef compared to Australian or New Zealand beef which have their own distinctive taste. Established credibility and confident among consumers of halal food Malaysia is already known as a halal hub, which gives good reputation to products exported to overseas, especially Islamic countries. Location advantage Malaysia is strategically placed in South East Asia, which is between the East and the West. This eases export to countries such as Europe, China, and others. This also helps to reduce transportation cost. Veterinary infrastructure Malaysia’s veterinary infrastructure is of high quality, wh ich ensures efficiency in beef cattle production. Industry controls and procedures Several regulations have been set for national beef production. For example, halal requirements and guidelines ensure cleanliness and safety.
High per capita consumption Malaysians consume a lot of meat, after poultry and fishes. Many of the local cuisines whether it is Malay, Chinese, or Indian use beef in its preparation. National and local government support The government is highly investing its efforts in ensuring enough beef cattle production for the country. This can be seen through efforts like allocating lands for specific livestock rearing usage, and the recently launched napier grass planting nitiative as livestock feed. Foreign investment in supply chain Several foreign companies also have set up their businesses in Malaysia, and have grown large and contributing greatly to the local production of beef cattle. One example is Charoen Pokphand (CP).
WEAKNESSES
Shortage and difficulty in obtaining high quality, high yielding breeders Several local breeds such as Kedah-Kelantan is not capable of producing the optimal amount of beef for consumption due to its low genetic capabilities. Some efforts have been done to cross breed them with beef cattle species such as Brahman from India. However, the production of high quality and high yielding breeders are still low. Farm labour and expert shortage Workforce and labour for livestock production in Malaysia is severely lacking, due to the younger generations preferring professional occupations such as doctors, lawyers, and engineers. Experts in veterinary required for beef cattle production is lacking in numbers. One expert may need to supervise and give advices to many farms at once, making their advises quite general instead of being focused and specific. Lack of land for cattle project site Even though the government has allocated several lands for agricultural use and livestock production, the numbers are still low due to lands being used for property development, besides some lands being left barren and undeveloped. High start up cost A lot of money is required to set up a beef cattle production facility. Examples include in setting up the rearing houses, slaughter facility, and storage for feed and equipment. Freight cost for transporting beef is also expensive. Low sustainable production due to lower reproductive performance Local breeds cannot produce offspring as much as other countries such as Australia. They also take longer time for recovery between parturition and breeding.
Slow operating durations and returns This is mainly on small investments, due to economic of scale and efficiency issues. Small farms are only capable of producing beef cattle for a certain period of time, and cannot fulfil a long-term requirement, especially those imposed by countries such as Singapore. Weather and climate Malaysia’s weather is hot and humid, which stresses animals causing them to be thin besides refusing to eat, thus low production. This is more prominent of oversea breeds which prefer cool climate and better quality forages. Need to comply with Australian government regulatory impost Countries such as Australia or New Zealand are very strict in their import procedure, where all cattle should be free from any diseases. They also must pass physical inspections. Low processing level Several slaughterhouses are not capable of producing meat as fast as demanded. This leads to shortage of supply. Need to comply with Australian government regulatory impost Countries such as Australia or New Zealand are very strict in their import procedure, where all cattle should be free from any diseases. They also must pass physical inspections. Dominance of unorganised and fragmented industry players Many farmers are involved in small scale, besides the lack of cooperation between them. They set their own prices, affecting the market price for meat.
OPPORTUNITIES
Doubts on origin and halal status of imported beef Some imported beef, especially from India was found to be buffalo meat. Some people are also concerned on the validity of halal status due to absence of halal logo, thus their decision to buy locally produced beef instead. Some of them even prefer to slaughter the cattle themselves. Population growth Malaysia’s population is rapidly increasing, due to high quality of life and great health being factors encouraging marriage and raising children. Furthermore, with expatriates and workforce immigrating into the country for education and construction purposes, the number will continue to increase. They will buy local foods, several of them using meat such as curries and barbecue. Halal market potential Halal market has a huge potential due to increasing number of Muslim population in nearby Islamic countries such as Indonesia, Brunei, and Singapore. The beef cattle produced here can also be exported to Middle Eastern countries. Guidance from authorities The government have set up several authorities responsible for managing and advising cattle producers. For example, Veterinary Department offers advices on health and disease management. Ministry of Agriculture and RISDA also has staff doing extension practices and produces manuals on smallholders beef cattle production. Extend supplier range There is still room for suppliers to improve themselves and make deals with oversea companies. The range can be extended worldwide compared to the current regional supply chain.
Develop a breeding capacity in Malaysia with heifers sourced from Australian operations Beef cattle can be locally produced, instead of importing them from overseas. Expansion of production facilities With enough capital injection from foreign and local investment, besides a proper cashflow, the production facilities are viable for expansion. More lands and machinery can be acquired. Value addition and diversification of product offerings Besides the usual fresh, raw beef, companies can adopt a top down approach where they also produce several meat based products. Examples of companies using this approach are Charoen Pokphand and McDonalds. Changing consumption pattern More and more Malaysians are eating meat based products as their quality of life improve and they can afford it, compared to being stuck between fish and poultry in the past. Innovative marketing approach Malaysians tend to market products online, reducing costs for traditional marketing through televisions and newspapers. It also has a worldwide reach at minimal cost. Examples include Facebook, Instagram, and Twitter. The impact is much higher now with the introduction of Digital Free Trade Zone (DFTZ) by the government. Better utilization of by-products Waste materials from rearing beef cattles can be used as agricultural fertilizers, besides unwanted food by humans can be used as feed material.
THREATS
Rising prices of meat products The high costs of production especially for feed materials, is causing price of beef products to be more expensive compared to fish based or poultry based products. Competition with cheaper imported beef Some beef imported from Indonesia are much cheaper, which affects selling of locally produced beef. No uniformity on standards Several differing standards in local beef cattle production can affect the qua lity and texture of meat produced which will also affect people’s perception of local beef. Threats of diseases Several existing diseases such as Foot and Mouth Disease (FMD) and mad cow disease is impairing local production capabilities, as infected cattles are needed to be quarantined. Cattle supply and price Cattle supply can be low at times of drought and natural disasters, thus increasing their price. Inflation also affects their price greatly compared to several years ago. Exchange rate Fluctuating exchange rate can be a problem, especially when exporting to other countries with higher rates. Increased competition from nearby countries Nearby countries such as Indonesia and Thailand also have increased their efforts in beef cattle production, especially in producing high yielding cattle breeds.
High imports Malaysia is too dependent on imports to fulfil the nation’s requirement for beef. If natural disasters or trade sanctions occurs, it is unlikely for us to maintain a sustainable beef production. Food security will be impacted. Supply disruptions during festival and holiday seasons Super high demands during festivals such as Hari Raya Aidilfitri and Aidiladha, Chinese New Year, and Deepavali can cause supply disruptions, causing producers unable to meet local demands, besides export demands from overseas.
CONCLUSION
