Turkey's feed production can claim to be exceptional. After all, when Thailand-based agri-food conglomerate Charoen Pokphand was deciding where to expand outside Asia, it chose to start a Turkish feed business.
Among all the countries that are present or prospective members of the European Union, Turkey is perhaps the only one at present enjoying a profitable period for its poultry producers against the backdrop of continuing problems with avian influenza.
These aspects have been highlighted this year in reports to the market bulletin published by the National Renderers' Association (NRA) office for Europe, the Middle East and Africa. Its first edition in 2007, for example, drew attention to the good returns being experienced by Turkish egg producers after a lean year for them in 2006. They had been hit by the bird flu crisis that arrived nationally in January 2006. Several have returned from the brink of bankruptcy, the report commented. During 2007, however, a year of sale prices lower than the cost of production had given way to the more profitable price of slightly over 14 US cents per egg about 70 percent above the level of the market 12 months earlier.
Turkish egg production is located primarily in the provinces of Afyon, Čorum, Konya and Kayseri, according to the NRA Bulletin. Nationwide, there are approximately 45 million laying hens and their output averages around 40 million eggs per day. It has become an earner of foreign exchange for the country through exports that in 2006 amounted to 8000 metric tons worth some US$ 12 million.
The downside has been the return of H5N1 avian influenza as of early February. Confirmed in a southeastern province named Batman, it also caused the hospitalisation of a young child as a precaution in neighbouring Diyarbakir.
Return of avian influenza
The outbreak itself was believed to have killed 170 chickens in a village while 10,000 birds in the surrounding area were culled in line with containment provisions. Another consequence for Turkish broiler growers was that it delayed the receipt of a clearance to export unprocessed chickens and also live birds to the European Union. Five companies had been approved as candidate exporters after EU inspectors in 2005 added Turkey to the list of countries qualified to send broiler meat to the community. A further inspection of the companies in April this year was forecast to open the door to exports of processed products, with another six to seven operators waiting to apply for similar privileges.
Earlier the bulletin had recorded complaints from broiler producers in Turkey that they were unable to find corn at reasonable prices. Domestic maize crops last year had produced only 3 million tons and no stocks were held by the Turkish Grain Board. With low yields also for the crop in Romania, Russia and the Ukraine, it seemed that the feed manufacturers had no option other than to buy US corn despite an import tax on it of 130 percent.
Adding to their woes, the Turkish government imposed a 10 percent surcharge on imported soybeans and lifted the charge on soybean meal from 4 to 13.5 percent. Analysts said these moves would cost the industry about US$35 million. During January, however, came the news that 300,000 tons of corn for feed use could be imported at zero tax, offering a dramatic reduction in local broiler production costs.
Poultry production in Turkey may now be worth over US$3 billion annually, on figures quoted by the NRA. It refers to figures from poultry meat producers' association Besd-Bir, indicating an increase in the yearly volumes of members from just 26,759 tons in 1990 and 311,347 tons in 1994 to 622,150 tons in 1998 and 705,206 tons in 2002. Afterwards there was further growth to a peak of 993,000 tons in 2004. Over the same period, the average quantity of poultry meat eaten per person/year in Turkey grew from 3.83 kilograms to 13.47kg.
More than 80 percent of Turkey's poultry meat is produced in modern facilities, the bulletin commented. However, per capita consumption of poultry meat lags the level of many other countries.
Last year, Turkish broiler producers arranged a significant increase in their budgets for advertising and promotion to make up for the business they had lost due to avian influenza. Earlier in the year, NRA correspondents referred to chicken company Seker Pilic in Bandirma as a case in point. Its advertising budget for 2006 and 2007 was raised to a total of US$5 million.
Most members of the national poultry producers' association are integrated and own their own mills. Turkey's main feed manufacturers nationally includes Banvit, which NRA reported in 2006 as having the first Turkish feedmill with a direct connection to a railroad.
This new connection, built inside a closed space at the Banvit mill in Bandirma, would allow the plant to unload macro-ingredients straight into bins located below the railroad tracks. In this way, unloading batches of 500 tons and transporting them to storage silos would take a fraction of the time that used to be necessary when the same material entered in endless lines of road trucks.
Feed production recovered
Figures from the Turkish feed association indicate that just less than 4 million metric tons of feeds for all farm animal species were made in 1990. By 2000, this had become 6.66 million tons. Three years of modest decreases followed, but then there was a recovery to 6.91 million tons in 2004 and 6.83 million tons in 2005 before again stabilising at 6.9 million tons in 2006.
Meanwhile, a new organisation has emerged to represent the interests of the dairy sector in Turkey. This association of Turkish milk producers was formed by bringing together more than 85 regional associations. One of its first successes could be in starting to provide a reasonable estimate of the quantity of milk produced nationwide. Official records relate to only about 2 million litres, but the actual level may be closer to 10-11 million litres per year.
Some observers believe cattle numbers nationally may have dropped by 30 percent in the past 12 years because Turkey's name appeared on the list of "BSE risk countries" which were stopped from exporting beef to the EU and US. On the other hand, they point to Turkey's emergence as a place of interest for many EU livestock producers who are unable to expand in Europe and therefore have started looking elsewhere as a potential location for new ventures.
After the establishment of several foreign-backed enterprises in recent years, a number of other companies reportedly are waiting for the investment climate to improve so they can move into producing milk and beef.
Ethem Sancak, a businessman who is a board member of the beef/dairy association Setbir and a former partner in the Koç-Alta Dairy Farm in Sanliurfa, south-west Turkey, has said there are European investors poised to invest up to US$10 million in beef and dairy production facilities when the moment is right.
Agriculture minister Mehdi Eker visited the US last year, trying to drum up interest among venture capitalists to invest in the Ceylanpinar complex for agricultural production. Ceylanpinar is being called the largest complex of its type in the world. It extends to 176,237 hectares of land south of the Urfa province which borders Syria. Owned by the state and utilised for crop production, the site includes 48,000 hectares of natural grazing and 8000 hectares of fruit and vegetable plantations, as well as an 870-cow dairy herd. Among its facilities are a feedmill and a corn-drying plant.
Another sign of the times came in 2006 when a producer of milk and dairy products was named as the year's largest taxpayer in the province of Bursa. The producer, Sütas, located at Karacabey, has been in the dairy business for the last 30 years. But this was the first time that an agriculture-based company became tax champion of the province. Sütas grossed 370 million YTL (approximately US$275 million) in 2005. It invested close to US$40 million in the three years to 2005 with another US$13 million earmarked for investment in 2006, towards a goal of achieving an annual growth rate of 50 percent.