Ostrich industry on the skids

by Chris Griffith
Published 26 May 1996 in The Sunday Mail


my face


The alarm bells are ringing in the Australian ostrich industry.

On the one hand, endless promotions continue to offer investments and even retirement plans based on the mercurial profits from breeding, buying, and selling birds.

Yet talk to the experts, and a different picture emerges.

Farms are on the market, and over the last six months there is a growing trend of dispersal sales and auctions. Some growers are offloading their chicks and getting out. And ostrich prices have fallen sharply.

One Queensland ostrich operation under the hammer next month was run by liquidated- company Golden Ostrich Farms. The sale, to be conducted by Wesfarmers Dalgety, will include 60 birds, and all plant and equipment.

Golden Ostrich director Joseph Hollaard last week told The Sunday Mail he had lost his whole life savings in one fell swoop. "I don't want to talk about the ostrich industry," he said.

But others will talk.

Wesfarmers Dalgety's Queensland stud stock manager Charles Weyman-Jones said fully imported ostriches once worth $30,000 each could be bought for only a few thousand dollars. He said the recent spate of auctions were setting "more realistic prices" for the birds. Wesfarmers Dalgety had conducted three auctions since October last year.

At an auction on February 10th at Harrisville, he said a 10-month fully imported African Black female had sold for $7,500, a similar male for $6,250. A five-month old female had sold for only $1,500.

Other auctioneers told a similar story.

Elders auctioneer Adrian Seiffert, who conducted a dispersal sale in Cesnock last Saturday, said a breeding pair imported from Canada a year ago for $90,000 had sold for just $36,000. Australian breeding cocks and hens had sold for $7,500 each, 12-month-old "juveniles" for $5,000 and two-month-old chicks for up to $2,100 (female) and up to $1,600 (male) maximum.

He said ostrich auctions were becoming common. Three took place just last weekend -- one in Victoria and two in NSW.

Driving the prices down is an oversupply of ostriches, once a rare commodity in Australia. Both Wesfarmers Dalgety and Elders say it's simply a case of supply far exceeding demand, a predictable outcome over five years given the bird's phenomenal breeding rate.

A two-year-old ostrich female lays 40 to 70 eggs annually, and can breed for 40 years. Around 20 chicks per year survive. A breeding-pair therefore is capable of producing 600-800 offspring, a phenomenal outcome.

Mr Sieffert said ostrich numbers (estimated at 60,000-65,000) were doubling annually. He said most of the market was involved solely in the speculative activity of breeding, buying, and selling, and not in farming.

"There is a limit to the number of times you can sell birds for profit, particularly when there is no end user, no major consumer. Those who entered the market at the beginning have made a good profit, but those who started to invest just two to three years ago are finding it harder to realise some income."

However both Mr Sieffert and Mr Weyman-Jones say it is not all bad news. The industry would evolve into a less flamboyant but more stable farming industry once the mechanisms for slaughtering ostriches were in place. But both were adamant the days of quick profiteering were over.

Yet the ostrich investment packages continue to promulgate.

This month, the Australian Securities Commission announced a crackdown on companies promoting ostrich pooled investment schemes which offered a combined package of sale, care, and agistment of birds. These investment schemes include retirement plans.

In many cases investors have little or nothing to do with the birds, who become just another commodity.

In a move to protect consumers, the commission will require companies to lodge a prospectus before they advertise their packages.

Financial adviser Noel Whittaker said he had never recommended ostrich farming as an investment because it was "highly speculative as are most managed agricultural industries". There's also a lack of control by the investor ... there's too many variables that can go wrong."

Meanwhile, the Australian Ostrich Association comprising 2,700 farmers is responding to these concerns by pursuing new challenges.

Federal president Andrew Youngberry said ostrich farming was "not finished" as an investment industry, "but the stupid unsustainable prices around are gone". "The greedy people who weren't interested in the industry all of a sudden decided to bail out, but that's good for the industry."

He said in 1993 the association had formed a company, the Australian Ostrich Company, which was involved in a joint project with a specialist emu abattoir in Western Australia. He said other ostrich abattoirs would soon be operating.

"We're starting processing in 10 to 12 weeks in Pyramid Hill (Victoria), and there's plans for one in Western New South Wales, South Australia, and Tasmania. One's on the drawing board for Queensland."

The Australian Ostrich industry also has been turning its attention to China.

Mr Youngberry said China had started its own ostrich industry as part of its battle to feed an estimated 490,000 increase in its population in 30 years. "The Chinese regard ostrich as having one of the best feed-conversion rates -- one kg of meat for every three kg of feed, compared to a 1:7 ratio in a (cattle) feedlot situation."

Mr Youngberry said he was about to visit China to discuss opportunities with government officials and the Chinese Ostrich Association. He said the 60,000 existing birds was insignificant when compared to the 100,000 birds which would be needed for slaughter annually over the next 3-4 years.

Caboolture ostrich farmer Mike Holt, who has just returned from China, said growers were seeking to jointly develop stock with Chinese breeders.

Of course, there are other spin-offs from ostrich farming. Leather, feathers, and even penises regarded as an aphrodisiac in Asia are in demand. And British Airways will soon be serving Australian ostrich on its North American flights. The Sunday Mail has even discovered an ostrich farmer who sells ostrich pies for $3 each.

Brisbane restaurateur Vladimir Loskutoff, who serves ostrich on special occasions, said the meat cost around $60 per kilo and was best eaten grilled or lightly panned.

"It's gamey and it' strong and it's a very deep, dark meat -- a lot stronger in flavour than beef. The meat is certainly substantial on the bird, and it's a marketable product. As an industry, I think it's got a future."

by Chris Griffith