Report Highlights:

In July 2015, Ethiopia released a summary of its forthcoming Livestock Master Plan (LMP), which is the governmental blueprint for directing the continued transformation of the country's livestock sector. The LMP's implementation is intended to strengthen the livestock sector, enhance Ethiopia's nutritional and food security situation, improve resilience, and spur economic growth that will lift nearly 2.36 million households out of poverty. The LMP could spur demand for certain imported feed inputs (e.g. soy), some of which may come from the United States.

Preview of Ethiopia's Transformative Livestock Master Plan:

In late July 2015, the Ministry of Agriculture and the International Livestock Research Institute jointly released a brief summary Ethiopia's five-year Livestock Master Plan (LMP) which covers the period of 2015-2020. (Note: The full text of the LMP was recently published online.) The LMP, which is aligned with the country's second Growth and Transformation Plan (GTPII), is primarily focused on enhancing livestock production in three value chains: chicken and eggs, red meat, and milk. In order to achieve the LMP targets, public and private investments, totaling USD $388.1 million, are needed in livestock genetics, feed, and animal health.

According to the summary, in order to maximize the impact of these anticipated investments, the Government of Ethiopia (GOE) will need to implement the proper mix of policy interventions to transform these value chains. The proposed interventions will target enhancing veterinary care, improving feed and food quality and safety, promoting exports, and stimulating an investment-friendly environment.

The overarching and long-term intent of these investments and policy interventions is to strengthen the livestock sector, enhance the country's nutritional and food security situation, improve resilience, and spur economic growth that will lift nearly 2.36 million households out of poverty. In addition, these actions are expected to temper the rising prices of milk, meat and eggs in urban city centers, while at the same time producing surpluses for export that will contribute to increased foreign exchange earnings. At the same time, the LMP may create opportunities for imports of certain products for use in the livestock sector, such as soybeans and feed supplements.

LMP Sets Ambitious Production Targets, With Emphasis on Chicken & Eggs:

According to the LMP summary, the GOE has set ambitious production targets for red meat, poultry meat and eggs, and milk. By the end of 2020, milk production is forecast to grow to nearly 6 million liters, up more than 90 percent from current levels. Of this amount, roughly 3.5 million liters will be consumed at the household level, while 2.5 million liters is expected to be available for sale into the commercial marketplace. Annual per capita milk consumption is forecast to climb to 0.6 liters by 2020 which, while still relatively small, is expected to continue growing into the future.

Red meat (beef, camel, goat, and sheep meat) production is projected to increase to nearly 2 million metric tons, up slightly more than 50 percent from existing levels. However, demand for red meat is expected to outpace production by an estimated 75,000 metric tons, meaning consumers will have to substitute red meat with other proteins, like chicken and eggs. From post's perspective, while red meat production is expected to increase over the next five years, rising local demand will likely reduce the availability of exportable supplies. In the case of beef, high domestic prices relative to the international market prices combined with strong demand within the country will likely constrain the exportable quantities of beef.

The production of eggs and chicken is forecast to grow exponentially in the coming five years in order to meet consumers' growing demand for inexpensive protein and reduce their dependence on the more expensive red meat. The egg production target is set at 32 billion, up almost 830 percent from current levels. This production figure translates into per capita consumption of roughly 6 eggs per week, whereas consumers are currently eating less than one egg per week.

Meanwhile, chicken production is expected to climb 467 percent from current levels, reaching 102,000 metric tons in 2020. Of this amount, only 18,000 metric tons is forecast to be available for sale in the commercial marketplace, with the rest being consumed at the household level. Annual per capita chicken consumption is forecast to more than double from less than 2 kg to a little more than 4 kg each year. Although chicken production is expected to increase, Post believes it will not be sufficient to keep up with consumers' growing appetite for inexpensive protein. Imported chicken could help meet this unmet demand.

Potential Market Opportunities for U.S. Feeds and Soybeans:

There are a couple of the trade-related policy interventions of interest mentioned in the LMP summary. First, policies eliminating excessive customs duties on feed ingredients could open opportunities for certain feed supplements from the United States and elsewhere. Second, policies to stop food oil imports and expand the number of local oil crushers could lead to potential prospects for imported U.S. and other origin soybeans. Presently, the domestic supply of soybeans is insufficient to meet both food and feed demands which are only expected to increase as the country's economy and population continues to grow.

Forecasted Annual Per Capita Consumption of Milk, Red Meat, Chicken and Eggs

Value Chain

2014/15

2020

% change

Production

Per capitaconsumption

Production

Per capita consumption

Production

Per capita consumption

Milk

3,072,000 L

0.03 L

5,929,000 L

0.06 L

93%

68%

Red meat

1,275,000 MT

14.5 kg

1,933,000 MT

19.1 kg

52%

32%

Chicken

164,000 MT

1.9 kg

405,080 MT

4.0 kg

147%

115%

Eggs

3,900,000,000

43.3

32,300,000,000

319.8

728%

621%