COLLEGE OF AGRICULTURE AND NATURAL RESOURCE

DEPARTMENT OF AGRIBUSINESS AND VALUE CHAIN

MANAGEMENT

Livestock Value Chain Management (ABVM 342)

Reading Material

By Adune Abebe

January 2023

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 CHAPTER ONE: INTRODUCTION TO LIVESTOCK

1. Introduction

Livestock production is a crucial component of agriculture that can support livelihoods

and food security of large numbers of people in developing world. Likewise, this sector
plays a significant role in income generation, food and nutrition security, draught power
and source of manure for about 85% of rural populations who depend largely on livestock
and crop production systems in Ethiopia. About 15 to 17% of the gross domestic product
(GDP) and 37 to 87% of household incomes are contributed from the overall livestock
sector, including ruminant and non-ruminant production(ILRI,2010 and R. Behnke and F.
Menagerie2011).

Ethiopia has a large livestock population, with an estimated 60.39 million cattle, 31.3
million sheep, 32.74 million goats, 11.32 million equines, and 1.42 million camels
(CSA,2018). Despite the large number and importance of these animals, their
productivity is low due to a number of factors such as inefficient management, poor
infrastructure, poor marketing and credit facilities, feed shortages both in quality and
quantity, and health constraints (T. Markos,2006 and K. Tsedeke,2007). Among these,
shortage of feed was identified as one of the primary constraints in livestock production.
One of the recommended profitable options to address this challenge is improved forage
production using strategies suitable for a given farming system(T. Adugna,2012).

1.1. Livestock and livestock management

Livestock are the domesticated animals raised in an agricultural setting to produce labor
and commodities such as meat, eggs, milk, fur, leather, and wool.

Livestock management

Management is the act of getting people together to accomplish desired goals and
objectives using available resources efficiently and effectively.

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Management is defined ‘as a set of activities directed at the efficient and effective
utilization of resources in the pursuit of one or more goals.

Management is the act or art of managing : the conducting or supervising of something

(such as a business) Business improved under the management of new owners.
Livestock management refers to the activities carried out by a farmer in his effort to raise
farm animals from day old to the point of marketing or disposing the animals. It involves
the provision and maintenance of adequate housing, good feeding, sanitation and
medicare.
Livestock management involves managing farm animals and supervising farm workers.
Livestock management requires knowledge of animal science and animal husbandry, as
well as good business sense. Many livestock managers must also keep financial records
for their operations. Depending on the size of the farm, managers may perform some
physical tasks like operating and maintaining machinery, as well as personally attending
to the livestock. Dairy farms,cattle ranches, swine operations, and poultry farms all require
effective livestock management to be successful and profitable.

Livestock managers have many things to consider when caring for their herd,
including animal health, nutrition, reproduction, grazing, hay and forage
management, fencing, and more. Managers should also follow market requirements and
fluctuations, which will affect the optimal times to market livestock.

Many livestock managers use specialty agricultural software to track all actions
performed in relation to livestock, including feeding, tagging, breeding, treatments, and
more. These programs can also manage scheduling and budgeting for farmers. The
software will keep detailed records with information vital to farm staff, animal
nutritionists, and veterinarians. Ear tagging allows for individual tracking of each animal.
Livestock management software is most commonly used for larger animals like cattle,
swine, and sheep.

Management of livestock must take into account variable seasonal factors, fluctuating
markets and declining terms of trade. The most successful producers have a good
knowledge of market requirements, matching product quality to suit. There are many

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factors that can determine the productivity and profitability of a livestock enterprise.
These include the supply and quality of feedstuffs, the use of the most appropriate
genetics, ensuring high health standards, optimising housing or environmental conditions,
meeting quality assurance requirements, and having a sound knowledge of market
requirements. This requires good communication along the value chain.
Livestock management techniques vary considerably with the type of animal, climate,
soil type, moisture regime, and infrastructures for use, distribution, and marketing the
animal products. As in crop management, the overall goal in livestock management is to
maximize the yield of desired product and minimize input of time, energy, and materials,
while maintaining the management system (i.e., soil, water, crops, and other related
resources) in a sustainable state. Major considerations in livestock include growth of,
harvest, storage, curing, and distribution of fodder (crops harvested then fed to livestock);
growth of forage (crops grazed in situ by livestock); dietary considerations (especially to
ensure mineral and lysine sufficiency for both ruminants and nonruminants); herd
maintenance; disease development and transmission; animal reproductive cycles; growth
and harvest of the animal and/or animal products; hygiene for the animals and animal
products; hygiene for animal wastes (especially urine and manures); handling,
distribution, and disposal of animal manures (especially for feedlot rearing of beef cattle);
grazing regime for forage animals (this includes free range, set-stocking, rotational, strip
grazing, and zero grazing); and minimizing damage to soil structure and vegetation
caused by the trampling of soil by animals (Briggs and Courtney, 1985; Tivy, 1990).

1.2. Importance and contribution of livestock

The livestock provides food and non-food items to the people.

Food: The livestock provides food items such as Milk, Meat and Eggs for human
consumption and these are an important source of animal protein to the members of the
livestock owners.
Fiber and skins: The livestock also contributes to the production of wool, hair, hides,
and pelts.

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Dung: In rural areas dung is used for several purposes which include fuel (dung cakes),
fertilizer (farm yard manure), and plastering material (poor man’s cement).

Storage: Livestock are considered as “moving banks” because of their potentiality to

dispose off during emergencies. They serve as capital and in cases of landless agricultural
laborers many time it is the only capital resource they possess. Livestock serve as an asset
and in case of emergencies they serve as guarantee for availing loans from the local
sources such as money lenders in the villages.

Weed control: Livestock are also used as Biological control of brush, plants and weeds.
Cultural: Livestock offer security to the owners and also add to their self esteem
especially when they are owning prized animals such as pedigreed bulls, dogs and high
yielding cows etc.
Sports / recreation: People also use the animals like cocks, rams, bulls, horses etc for
competition and sports. Despite ban on these animal competitions the cock fights, ram
fights, horse fights and bull fights are quite common during festive seasons.
Companion animals: Dogs are known for their faithfulness and are being used as
companions since time immemorial. When the nuclear families are increasing in number
and the old parents are forced to lead solitary life the dogs are providing the needed
company to the latter thus making them lead a comfortable life.
Income: Livestock is a source of income for many families especially the resource poor
who maintain few heads of animals. Cows in milk will provide regular income to the
livestock farmers through sale of milk.
Employment: it provides employment opportunity for a large number of people.
Social security: The animals offer social security to the owners in terms of their status in
the society.Animals are used for various socio religious functions. Cows for house
warming ceremonies; rams, bucks and chicken for sacrifice during festive seasons; Bulls
and Cows are worshipped during various religious functions.
Draft:The farmers especially the marginal and small depend upon animal power for
ploughing, carting and transport of both inputs and outputs.

In general livestock make an important contribution to most economies. Livestock

produce food, provide security, enhance crop production, generate cash incomes for rural

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and urban populations, provide fuel and transport, and produce value added goods which
can have multiplier effects and create a need for services. Furthermore, livestock
diversify production and income, provide year-round employment, and spread risk.
Livestock also form a major capital reserve of farming households.

1.3. Livestock farming system

Livestock farming is simply the management and breeding of domestic, livestock
or farm animals for the purpose of obtaining their meat and products (milk, eggs, leather,
etc.). It can also be described as the economic activity that involves raising domestic
animals for human consumption and obtaining meat, milk, wool, fur, honey, among
others.
Livestock farming is one of the oldest economic activities of man started by early men. It
guarantees food supply, hides, skins, bones, milk and other animal products without
going to the forest to hunt. Livestock farming includes the breeding of cattle,
sheep, pigs, goats, poultry, rabbits, snails, fishes, and honeybees.

Importance of livestock farming:

1. It generates high-quality food products such as meat, egg, milk, cheese, etc.
2. It is one of the few human productive economic activities that are truly
sustainable.
3. It generates employment opportunities and serves as a source of income
4. It can help a country to generate foreign exchange earnings through the export
of livestock products.
5. Other local economic sectors benefit directly or indirectly from its activity:
food processing industries, handicrafts, tourism and hospitality.
6. Bigger animals such as cattle, horse and donkeys can be used for some special farm
operations such as ploughing, harrowing and even beasts of burden.
Types of Livestock Farming
There are different types of livestock farming systems that are differentiated by the
production processes that take place in each of them.

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1. Intensive Livestock Farming
Intensive livestock farming is one in which the animals are housed with adequate
temperatures, feed and health care necessary for the production of animals to be healthy
and faster. Intensive farming is often called ‘factory farming’. In this system, the
selection of breeds is made for different types of production. Intensive farming is a
technique used to yield high productivity by keeping large numbers of livestock indoors,
it is an agricultural system that aims to get maximum yield from the available land.
Animals are kept in specialized buildings and can remain indoors for their entire lifetime.
This permits precise control of their feed,watering, breeding , behaviour and disease
management.It is both capital and labour intensive.

Intensive system of farming involves:

1. Higher levels of input and output per unit area

2. Minimum fallow land
3. Capital and labor intensive
4. Higher farm profitability in contrast to traditional agriculture
Advantages of Intensive Farming

 The main advantage of intensive farming is its ability to produce vast amounts of
food on the same amount of land at a lower unit price for an ever increasing world
population.
 One of the major advantages of this farming technique is that the yield is high.

 It helps the farmer to easily supervise and monitor the land and protect his
livestock from being hurt or hounded by dangerous wild animals.

 With the introduction of intensive farming, farm produce, such as vegetables,

fruits, and poultry products have become less expensive.

 It also aids in solving the worldwide hunger problems to a great extent. This
means that common people can now afford a balanced and nutritious diet.

 The introduction of intensive farming allows the space, equipment, and other
requirements for farming to be less and more economical.

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  Another advantage is that large productivity of food is possible with less amount
of land.

 This leads to economies of scale and directly contributes towards meeting the
ever-growing demand for food supplies.

 The use of advanced techniques and technologies is an advantage since, through

them, the rancher manages to obtain the best possible genetics.
 Control is another important point. Intensive livestock works with a smaller area,
allowing daily and approximate monitoring. Thus, the nutritional and medicinal
needs of livestock are more easily met.
 Beyond its economic value, livestock farming supports the livelihoods and
provides food security to people.

Disadvantages of Intensive livestock farming :

 Intensive livestock farming requires storage of slurry and manure, which can
create disposal difficulties and pollution. Nonetheless if cattle slurry is stored
safely it can be used to produce energy, for example in anaerobic digestion units
which produce green energy.
 Another disadvantage relates to the welfare of the farm animals - they are unable
to behave naturally by roaming and grazing, grouping socially, or displaying
maternal instincts.
 Furthermore when animals are kept in restricted spaces this can often lead to
discomfort, lameness and aggressive behaviour.
 Moreover, animal waste and discards is often not treated appropriately with
farmers often disposing their waste in rivers where they pollute the water and
threaten the ecosystem’s biodiversity.
 Intensive farming involves the use of various kinds of insecticides.
 It can lead to overcrowding due to the fact that animals are kept in holding
facilities which can lead to pollution and break out of diseases and infection.
 Intensive farming is highly criticized and thought to be cruel to the animals.
Because it involves the use of various chemicals, growth hormones and excess

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 crowding on a small space, the outcome is usually poor living conditions and
hygiene for the livestock. Keeping livestock above their capacity is associated
with pollution and poor hygiene which results in infections and various diseases.
 At the same time, we cannot discount the increasing animal welfare,
environmental and health concerns that the intensification of livestock farming
brings. When it comes to animal welfare, cost saving techniques often has an
impact on the health and well-being of the animals.
 Legislation in many countries and regions, such as the European Union and New
Zealand, recognizes animals as “sentient beings” and not merely commodities
which means that they can experience emotions, including pain and distress.
 This means that it is not accepted that animals reared as livestock should live
under strenuous conditions. Unfortunately, practices where animals are
transported long distances to market under inhuman conditions or slaughtered in
painful ways still persist.

2. Semi-intensive Livestock Farming

Semi-intensive livestock farming is one in which the animals are housed and fed, but are
allowed to graze or move around the farm to scavenge within in an enclosed area within
the farm area. It is the combination of both intensive and extensive farming.
Advantages of Semi intensive Livestock Farming
 Particularly suitable where land is limited and small holder farmers
 Safe from predators
 Low feeding cost than intensive farming
 Low labor cost
Disadvantages of Semi intensive Livestock Farming
 Requires close monitoring and control
 Need more land than intensive farming
 Competition for feeds
3. Extensive Livestock Farming
Extensive farming agriculture (as opposed to intensive farming) is an agricultural
production system that uses small inputs of labour, fertilizers and capital relative to the

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land area being used. In livestock extensive farming commonly refers to cattle, sheep and
goat farming in areas with low agricultural productivity. The animals are kept free range
for part or all of their production cycle.

Extensive farming systems are typically managed outdoors, for example with free-range
egg production. Animals are free to graze outdoors and are able to move around at will.
Extensive systems often occur in upland farms with much lower farm stocking rates per
hectare. Sheep and beef farms will have the animals grazing outdoors on pasture and only
brought indoors and fed meals during lambing season and calving season or during the
part of winter when outdoor conditions are too harsh. Extensive cereal and dairy farms,
for example, are often managed to also meet organic farming standards.

Extensive livestock farming is one that is carried out on large areas of land, such as
meadows, pastures or mountains so that animals graze and take advantage of the natural
resources of various areas.
Advantages of Extensive farming
 Mostly animals are grazed on pastures native to the locality therefore less
likelihood of problems associated with exotic species.
 A significantly lower labour input is required and systems are selected that are
sensitive to the natural environment such as sheep farming on harsh hill farm
situations.
 Animal welfare is perceived to be better since the animals are not kept indoors
constantly and so are allowed to behave naturally. For many crop and animal units
they have much lower requirements for fertilizers, medicines, pesticides, water
and energy.
 Animal manure directly, which sustains the grass production and allows a gradual
release of nutrients back into the environment which is much more
environmentally friendly.
Disadvantages of Extensive farming
 Yields of livestock are much lower than in intensive farming systems

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  The greater requirement for land area can restrict the use of land for other
managed habitats to encourage particular wild species e.g. forestery and
meadows.
 Livestock growth rate slower than intensive farming systems
 Livestock time to maturity much longer than intensive farming systems.
 Unforeseen droughts can lead to devastating losses.
 Extensive farming was once thought to produce more methane and nitrous
oxide per kg of milk than intensive farming
4. Nomadic Livestock Farming
Nomadic livestock farming is characterized by grazing of animals like cattle on a large
expanse of land so that they have a natural diet. In this system, the animals are taken to
different lands to eat various foods and resources. This type of livestock farming is
known as nomadic or semi-nomadic. It is typical of peoples who live in arid areas where
cultivation is difficult to carry out, as in some territories in Africa and Asia.

Advantages of Nomadic Herding

 Access to green pastures and water
In areas where there scarcity of food and water, the movement of the herds prevents
starvation and death as the herd well have access to green pastures and water by moving
to where they can be found.
 Low cost of raising livestock
Nomadic herding is the cheapest method of raising livestock. Nomadic herding does not
require building of farm structures and buying of farm equipment. Feed is the major cost
in livestock farming. With nomadic herding, livestock farmer does not need to buy feeds
thereby reducing the cost of livestock production. The herds have access the free pasture
to graze on, cost of feed is therefore out the budget.
 Low cost of marketing
Transportation is one the major cost of livestock marking. As the move on hoof from
place to place, at the point where they mature becomes the market.
Disadvantages of Nomadic Herding
 Uncontrolled breeding

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  Poor health and biosecurity practices
 Production of low quality beef and diary
 Herds and herders are exposed to attacks
 Stray livestock destroying farm crops
 Farmers-Herders conflicts
 Poor lifestyle for herders and their family
5. Transhumant Livestock Farming
Transhumant livestock farming is one in which the animals are moved to areas whose
fields have food, depending on the season of the year. This livestock farming system is
very advantageous because it increases the fertility of the soils thanks to the manure of
the cattle. The animals feed on various grasses and vegetables and contribute to the
dispersal of seeds, among others. At the moment, the transhumant cattle ranch is little
practiced. However, it is still carried out in various areas of Africa.

Advantages
The movement of the stock enables the animals feed (types of feeds) in areas where water
and food are available, thereby preventing the animals from starvation and death
Disadvantages
 Very poor quality and undersized animals are produced
 There is no pasture management
 No regular supply of food and water
 Animals are exposed to injuries, pests, diseases and death
 The herdsmen are equally exposed to all sorts of danger and death
 Clashes often occur between the herdsmen and crop farmers during migration and
grazing when animals graze and destroy crops.
1.5.Status and challenges of livestock production
 Shortage of feed
 Scarcity of water
 Unavailability of cash/credit service
 Lack of AI service

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 lack of awareness about feeding,housing,watering and etc
 lack of improved varieties/breed performance problem
 less management system
 market problem

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 CHAPTER TWO: LIVESTOCK PRODUCTS AND LIVESTOCK FUNCTION
2.1. Livestock Products
A. Foods

The main products of livestock are meat, milk and eggs including their derivatives. The
use of national prices is only one method of valuing them and of making them
comparable to other foods and products. The calorific value of livestock foods is
important where they are the main subsistence basis; this often implies a luxury
consumption of protein while the diet is deficient in energy. Consideration of the protein
value is one way of accounting for the particular nutritional quality of livestock foods.
All methods can be used to relate the value of livestock foods to other foods, grain being
the most common reference commodity. The value of livestock products can therefore be
expressed in grain equivalents (GE) defined according to the different valuation methods.
The use of the term grain equivalent will in this study be restricted to grain equivalents as
derived from average domestic price ratios. The conversion factors are therefore 4.0 for a
weight unit of meat, 1.7 for that of milk and 10.0 for that of eggs. If the main food crops
are converted to grain equivalents (grains and pulses at the conversion factor of 1.0, roots
and tubers at 0.25).

B. Materials

The term material is to refer to non-food livestock products that can be regarded as farm
outputs. This excludes manure which normally is used as an input for crop production
although in its use as fuel it could be classified as livestock materials. In the restricted
sense the major materials from livestock are hides, skins and wool. Horns, hooves and
even intestines, scrota and the like are also used but valuation on an aggregate level
appears impossible. By-products from the processing of food products, e. g. bone meal,
can be mentioned but as yet their role is minor in Tropical Africa.

C. Manure

The value of livestock droppings for soil fertility is recognized by most tropical farmers
and livestock holders. In addition manure is used for fuel and as a building material.

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Valuation will here concentrate on the yield-increasing effect as a proxy for the value in
all uses although it is realized that manure plays a crucial role as fuel in many areas. If
the alternative of manure application to fields exists it must be concluded that the farmers
rate the fuel value of dung ever higher than its fertilizer value. The agronomic value of
manure lies in its contents of organic matter and of nutrients.

D. Work

Work for which livestock are used includes land improvement (e. g. contour ploughing,
drainage ploughing), soil preparation (e. g. ploughing, hoeing, harrowing), crop
husbandry (e. g. seeding with drills), crop processing (e. g. threshing) and on-farm
transport. Off-farm transport is importantly connected to trade and marketing. Particular
facets of livestock work are the drawing of water in arid areas both for livestock watering
and for human consumption, the transport of homesteads in nomadic livestock husbandry
systems and finally the fact that livestock walk themselves to the place of sale and
slaughter. The two most important categories of animal work are traction on one side and
transport on the other. Traction refers to the employment of the tractive force of animals
in crop production, transport to the translocation of loads. The most important species
used for work are cattle, the group of equines and camels. The population of draught
cattle has recently been estimated by FAO (AT 2000 1979). There is a total of 25 million
work animals in Tropical Africa. Ethiopia accounts for about one third. Finally the value
of traction is also influenced by the application of complementary inputs like fertilizers,
irrigation or simply better husbandry standards as expressed e. g. in row planting. Cassa
et al (1965) therefore see the major value of animal traction in the general increase in the
farm capacity which allows to multiply by a factor the beneficial effects any other
improvements may have on agricultural production, a factor that can only be quantified
for specific situations. The introduction of a pair of draught oxen is generally believed to
increase the cultivation capacity of a family engaged in traditional hoe farming by a
factor of 2 or 3 (Hrabovszky 1980, Munzinger 1981).

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E. Animals

Reproduction and Growth Herds and flocks reproduce themselves. Additions to the
existing stock must therefore also be considered as livestock products. The value of
growth is a function of the value of the standing stock. Ideally the valuation of the
standing stock and of growth have to take into account all the products the particular
livestock species provides; the discounted value of this stream of production over time
would constitute the value of the standing stock from which the value of growth could be
derived. Livestock probably constitute the most valuable asset of the rural population in
Tropical Africa apart from land.

2.2. Livestock Functions

The functions of livestock refer to the mode of action or activity by which livestock
fulfill their purpose. Partially the functions of livestock are tied to the livestock products.
In the case of meat and milk, the related function of livestock is to provide income and
subsistence trough their sale or consumption while with manure, the function of livestock
is to provide an input to crop agriculture thereby increasing production and income. The
differentiation of products and functions allows the differentiation of livestock production
systems even if they are based on the same product, e.g. herd growth for security, for
social reasons (prestige) or for a pure income objective. It is also a prerequisite for the
realistic valuation of livestock products because the value of meat for export can be
judged differently from its value as a source of subsistence. The following functions can
be fulfilled by livestock

- the output function (subsistence, income and nutrition)

- the input function (crop inputs and farm integration)

- the asset and security function

- the social and cultural functions.

2.2.1. The output function: The production of food and non-food products for home
consumption provides subsistence. If the products are partially or wholly sold they

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generate cash income. For a management unit that trades a farm input like manure
livestock fulfill an income function although the farm that uses that manure in crop
agriculture may look at it as a crop input. If livestock constitute the only source of
subsistence one can hardly talk of a nutritional role of livestock that goes beyond that
implied by subsistence. If the livestock products, possibly after trading, serve to upgrade
an otherwise deficient diet of say root crops a particular nutritional role can be attributed
to the livestock products. The nutritional role of livestock products also assumes
importance from a more aggregate view. For the production unit that sells livestock
products the income function of livestock stands in the foreground. From the national
point of view, however, the livestock products may be valued for their nutritional
importance to certain vulnerable groups of the population for which they become
available or if the livestock products are destined for export the income function, from
the national point of view, is enlarged to include the foreign exchange effect of these
exports.

2.2.2. The input function: If livestock are used for their manure or for their work
capacity they fulfill a farm input function. The interactions of a livestock sub-system with
a cropping sub-system (or between a pure grazing system with a pure cultivation system
as distinct but interrelated management units) may be very complex going beyond the
simple provision of a farm input. This function is then better described as farm
integration (e. g. Brinkmann 1922). The farm integrative function refers to all the
different effects livestock may have on the productivity of the resources engaged in
agriculture thereby rendering the farm more productive than it would be without the
livestock enterprise. The conversion of low-value crops and crop residues to high value
animal products by feeding them to livestock; - the yield increasing effect of including
fodder crops in crop rotations;- the balancing of production and market risks of cropping
by the livestock enterprise (see security function). The input functions of livestock in
mixed farming systems can therefore take on many different forms. It covers very
different degrees of integration of the livestock sub-system into the overall farming
system.

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2.2.3. The asset and security function: One aspect of the risk balancing effect of
livestock is simply that it is a non-cropping activity. There is the likelihood that not both,
crop production and "noncrop" production, are affected by a negative deviation from the
expectation at the same time. Other aspects are that some lines of livestock production
(milk, eggs) provide a regular income as opposed to cropping and that livestock can be
readily sold to solve a liquidity problem of the farm. All this adds to the farm's economic
security. But livestock have an additional security function by being an asset. This
becomes obvious when seen in the context of traditional agriculture, where any
combination of the following characteristics may apply (Barth 1973, Mc Cown et al
1979): - Arable land is communally owned or 'on loan' from the clan or group; it is not a
disposable asset; - cropping is principally undertaken for subsistence but periodically
yields a saleable surplus; - cropping is carried out on a low technological level; capital
inputs are limited to seed and simple equipment; - commercial banking institutions are
not present or are not trusted. Under these conditions surplus from cropping cannot be
invested in land or in other factors of agricultural production. It is likely that a balance is
struck between the drudgery of labour in agricultural production and the satisfaction of
returns to labour essentially in the form of subsistence. The situation is different if
livestock are present in the economy. Agricultural surplus can be converted into livestock
through sale, exchange or even direct feeding of crops. Livestock have a savings account
function by being recognized as private property, by being a relatively safe and durable
form of storing wealth, by earning interest in the form of offspring, and by being readily
disposable and convertible into cash or other valued things (liquidity). Livestock are
better than a savings account because they are unaffected by inflation and remain under
complete control of the investor or those he trusts. The asset and security function is not
limited to the rural population. Even town-dwellers may prefer investment into livestock
over other investment venues. In many cases the asset or security function of livestock
contributes more to the understanding of a livestock production system than the
production of meat and milk or the provision of farm inputs like manure and traction*.
The function should conceptually be seen in sharp contrast to the keeping of cattle for
social and cultural reasons like prestige and social cohesion. Of course the ownership of
livestock adds to prestige and makes it easier to obtain assistance from other people. But

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this is the case with any form of saving account or monetary wealth and is a derived
phenomenon limited neither to livestock nor the developing world. At the basis is the
asset role of livestock.

2.2.4. Social and cultural functions: The functions of livestock so far described
essentially relate to agricultural production, subsistence, income, and wealth and may be
summarized as the economic functions of livestock. If livestock are important for
production, subsistence and wealth it is to be expected that man takes an interest in
livestock and places a value on them. The more important the economic functions of
livestock, the greater that value will be. The social and cultural role of livestock (for an
individual one might include the emotional role) is here viewed in the restricted sense of
a role that cannot be explained from the economic functions alone. There are also
societies which cattle are valued for their long horns, camels for their racing capabilities;
both traits appear quite unrelated to any economic function of livestock. At this stage,
without reference to a specific production system the social and cultural function of
livestock needs no further elaboration. The function exists but is often overlain by other
functions and often disguises management principles that can be related to
straightforward economic motives. In general terms two conclusions can be drawn: - The
more diversified and the more important the economic functions of livestock are in a
traditional society the more likely it is that also social and cultural values are attached to
them. - While one has to guard against over emphasizing the non-economic motives in
livestock keeping in Tropical Africa it might be a serious mistake to ignore social and
cultural functions of livestock, particularly as they are likely to affect development
efforts.

2.3. Livestock Production efficiency

Production is the process of creating, growing, manufacturing, or improving goods and
services. It also refers to the quantity produced.
In economics, productivity is used to measure the efficiency or rate of production. It is
the amount of output (e.g. number of goods produced) per unit of input (e.g. labor,
equipment, and capital).

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The level of productivity, in the production, determines the profitability, efficiency and
performance of the enterprise, i.e. the higher the productivity of the firm the greater will
be the earning capacity. It aims at determining the relationship between the input and
output, in a particular production process.
The Differences Between Production and Productivity
The difference between production and productivity can be drawn clearly on the
following premises:
1. Production is an organized activity, wherein step by step conversion of raw
materials into useful output takes place. On the contrary, Productivity is an
indicator of efficiency in the production in terms of optimum utilization of firm’s
resources in the creation of desired output.
2. Production is a process of value addition, wherein at each level, some value is
added to the product. Conversely, productivity is a measure of efficiency.
3. Production exhibits the number of units produced by the firm in a given period.
As against, productivity highlights the ratio of output to input consumed.
4. Production is always expressed in absolute terms, i.e. the volume of output
produced. On the other hand, productivity is denoted in relative terms, meaning
that it determines the quantitative relationship between output generated and
resources consumed.
5. While production ascertains the value of output generated, productivity
determines the how well the resources are utilized by the firm in the generation of
output.

20
CHAPTER THREE: VALUE CHAIN ANALYSIS AND MANAGEMENT FOR
LIVESTOCK PRODUCTS
Introduction
Concepts and definitions of value chain
A value chain is made up of a series of actors (or stakeholders) ranging from input
suppliers, producers and processors to exporters and buyers engaged in activities required
to bring agricultural product from its conception to its end use (Kaplinsky and Morris,
2001). A value chain, therefore, incorporates productive transformation and value
addition at each stage of the value chain. At each stage in the value chain, the product
changes hands through chain actors, transaction costs are incurred, and generally, some
form of value is added. Value addition results from diverse activities including bulking,
cleaning, grading, and packaging, transporting, storing and processing (Anadaja and
Berhanu, 2009).
Value chain describes the full range of activities which are required to bring a product or
service from conception, through the different phases of production (it included three or
more of the following: producers, processors, distributors, brokers, wholesalers, retailers
and consumers (Kaplinsky and Morris, 2001).

According to Bammann (2007, cited in Dawit 2010), there are three important levels of
value chains (1) Value chain actors: The chain of actors who directly deal with the
products, i.e. producer, processer, trader (2) Value chain supporters: The services
provided by various actors who never directly deal with the product, but whose services
add value to the product. (3)Value chain influencers: The regulatory framework, policies
and infrastructures.

The ultimate goal of value chain is to achieve an overall win–win situation that benefits
consumers, producers, and other actors in the chain alike. However, in many cases it is
the actors with decision-making power over the related activities who ultimately gain the
most from value chains. A value chain links the steps a product takes from the farmer to
the consumer. It includes research and development, input suppliers and finance. The
farmer combines these resources with land, labor and capital to produce commodities. In
the traditional selling system farmers produce commodities that are "pushed" into the

21
marketplace. Farmers are isolated from the end-consumer and have little control over
input costs or of the funds received for their goods. In a value chain marketing system,
farmers are linked to consumers' needs, working closely with suppliers and processors to
produce the specific goods consumers demand. Similarly, through flows of information
and products, consumers are linked to the needs of farmers. Under this approach, and
through continuous innovation, the returns to farmers can be increased and livelihoods
enhanced. Rather than focusing profits on one or two links, players at all levels of the
value chain can benefit.

Value chain analysis is a method for accounting and presenting the value that is created
in a product as it is transformed from raw inputs to a final product consumed by end
users. Value chain analysis is conducted for a variety of purposes. The primary purpose
of value chain analysis, however, is to understand the reasons for inefficiencies in the
chain, and identify potential leverage to gain advantages/ points for improving the
performance of the chain, using both qualitative and quantitative data.

3.1. Dairy value chain

The dairy value chain starts with the raw product/milk supply at the farm level and ends
with consumers who make the choice to buy, or not to buy, the finished product. The
dairy value chain has several links between the farm and the consumer: procurement,
transportation, processing, commodity storage, conversion packaging, distribution,
retailing, and food services.

3.1.1 Formal Dairy value Chain

The formal dairy chain involves several distinct value adding activities from production
of the milk through reaching to the final consumer in the market. These activities include
input supply, milk production; Raw milk transportation, bulking and cooling, processing
and packing, transporting processed milk and milk products and retailing gathering
(bulking); processing; transportation; and retail trading.

Input supply category of segment includes the supply of all inputs that are required by
smallholder milk producers and dairy commercial farms. Different dairy value chain
actors are engaged in supplying feed, AI service providers, Veterinary services,

22
Machinery Equipment and packaging, financial institutions. In formal dairy chain the
main milk producers are commercial dairy farmers and smallholders located on urban and
pre urban areas of the milk shades.

Bulk
Process Transp
Input Milk Trans ing
ing and ort and
Suppl  Produ  porter and   Reta Consum
packag Distrib  
iers cers s cooli iling er
ing ution
ng
Fig.3.1. Value chain Business Operators in dairy.

3.1.2. The Informal Dairy Value Chain

The informal market involves direct delivery of fresh milk by producers to consumer in
the immediate neighborhood and sale to itinerant traders or individuals in nearby towns.
In the informal market, milk may pass from producers to consumers directly or it may
pass through two or more market agents to local consumers and neighboring countries
(Somaliland and Kenya) consumers. The informal system is characterized by no licensing
requirement to operate, low cost of operations, high producer price compared to formal
market and no regulation of operations. The informal (traditional) milk channel has
remained dominant in Ethiopia. Moreover this channel provides substantial amounts of
milk which goes into traditional dairy processing and then traded especially traditional
soured butter.

The main milk producers in this channel are sedentary rural smallholders and pastoralists.
The main feed sources for these milk producers are pasture land, green fodder from their
own land and crop residues. Besides this, in some rural areas local brewery residue and
hay also used.The government extension system takes assumes most of the responsibility
for supplying AI, veterinary services and drugs. However there are individuals’ drug
ventures in some areas of the pastoralists and sedentary rural areas.

Available data indicates that out of the total milk produced about 68.4% is retained at
household level, about 14.6 % is sold, 17% utilized by calves. The smallholders use the
milk retained at household level for consumption (50.8%) and traditional processing two

23
purposes (49.2%). More over the total milk supplied to the market is geographically goes
to the urban (69.2%) and the rural neighborhood (30.8%) market.

Fig.3.2. Flow scheme for milk utilization by smallholder dairy farmers in Ethiopian.

3.1.3 Value addition in milk and milk products

Milk, more than most agricultural products, is closely associated with the transformation
of the raw product into processed products and, as a result, the adding of value via
processing. Stemming from milk’s perishability and high water content, processing can
be considered an essential element for storage, preservation and transport. This is
reflected by the fact that most milk in the world is not consumed in its original liquid
form, but in some processed state: cheese, butter, yogurt, powder etc. Additionally, where

24
milk is consumed as a liquid, it is increasingly presented in a wide variety of forms: low-
to full-fat, flavored, with added vitamins and minerals. Here, the list is extensive and,
frequently, value is added to the milk in the process.

The food market in general and the dairy market in particular, is noteworthy for its
dynamism and inventiveness. Consumers are many and varied. In the dairy market of the
future, some will demand low-priced products, while others will pay a premium for
quality and uniqueness. The challenge for the dairy industry is to identify which markets
it can profitably supply and to focus its efforts on meeting the needs of consumers in
these markets.

The demand for value-added dairy products is affected by a number of factors relating
both to the general economic and social situation, and to specific developments in the
dairy market. Some important elements are:

 increased urbanization and income growth in the developing countries;

 growing power of supermarkets;
 concentration in the processing sector;
 different levels of adding value;
 increased segmentation of consumption and,
 Changes in eating habits.
 Methods of Value Addition

3.2. The beef cattle value chain

The Ethiopian meat and live animal value chains have developed over the years into a
series of complex constituents involving various actors that include producers, village
traders, wholesalers, retailers, various (and in some places, numerous) middlemen,
processors and exporters.

25
Figure 3.3 Livestock market value chain structure

Challenges & opportunities for beef production & value chain

Challenges:

The major challenges facing the beef cattle marketing and value chain are:

 Less competitiveness of these firms in the domestic and export markets which has
been limited by the underutilization of the processing capacities.

 It has been observed that the live animal throughput is inadequate resulting in the
existing meat processing facilities operating at less than 50% of their operational
capacities. This is apparently due to inadequate supply of the required quality live
animals for meat processing by the export abattoirs which makes them less
competitive in the global or regional meat market.

26
  The export abattoirs are competing for the domestic supply of live cattle with the
demand for live cattle for domestic consumption, and for formal and informal
(cross-border) trade.

As a whole, the following are the main challenges faced beef cattle production, value
chain and marketing:-

1. Lack of well-defined breeding program and production systems.

2. Lack of an integral connection between the stakeholders involved in the production

chain.

3. Inadequate market promotion and study tours to potential importing countries

4. Lack of efficient air transport for export of fresh and chilled meat.

5. Some markets are also dominated by influential personalities and illegal exporters.

6. Limited access to market-related information (e.g. on prices, value chains,

competitors, consumer preferences).

7. Lack of capital to invest in assets, equipment and inputs that would improve quality.

Opportunities

High demand of animals by the local abattoirs

The export abattoirs are required to ensure a consistent and continuous supply of meat in
order to meet the demand of the customers in the importing countries. Thus, there is an
urgent need for export abattoirs to devise alternative strategies to ensure adequate market
supply of quality live animals to meet their processing needs in order to improve their
efficiency and competitiveness. There are seven abattoirs in Ethiopia which processe
canned meat products mainly for the army, domestic market and some exports. These
abattoirs are located in Addis Ababa, Melge Wondo, Dire Dawa, Kombolcha, Gondar
and Debre Zeit. Of these plants, Melge Wondo is to some extent preparing frozen beef
and that of Debre Zeit abattoir produce chilled beef, sheep and goat meat for both
domestic and export markets.

27
Domestic Consumption

The domestic meat demand is believed to increase with increasing literacy and family
income. Meat consumption is often an indicator of the economic status of a country or an
individual. People with a higher social or economic status demand a greater amount of
high-quality meat products. The per capita consumption of meat in
developed/industrialized countries is much higher than in developing countries. Countries
whose population consumes the least amount of meat are located in Africa and Asia.

Developed countries consumed a consistent level of 77 kg of meat per capita annually,

while developing countries struggled to maintain a diet with only 25 kg of meat per
capita annually. Ethiopians remained slightly below the meat intake of all low-income
countries and consuming 9 kg per capita annually.

3.3 Poultry Value Chain

Overview of poultry value chain in Ethiopia

Generally, the poultry sector can be classified as one having both low levels of
production and productivity. Production is dominated by backyard producers and
characterized by small flock sizes with limited input use, low output, and periodic
devastation of flocks by disease. Poultry are owned and managed at household level and
are maintained under a scavenging system with little or no inputs used for housing,
feeding or health care. There are various reasons why poultry are kept at household level,
ranging from socio-cultural to economic uses. Traditional farm households sometimes
keep poultry for cultural and religious purposes related to the color of a chicken and the
season. Some households keep poultry for meeting immediate cash needs, while others
hold them for meeting social obligations such as gifts during weddings. Typical
household flocks are often small in size with an average of 7-10 mature birds per
household. Market-oriented production and marketing of poultry is largely absent except
by the recent appearance of private commercial farms established over the past 5-10
years in response to the growing demand for poultry products in urban Ethiopia,
especially Addis Ababa.

28
Actors involved in poultry value chain

Few actors mediate trade between producers and consumers in the traditional poultry
sector. Traditional poultry producers in the backyard system take on the various functions
of other stakeholders in the chain, such as distribution and marketing. The value chain is
often very short, mainly through a direct interaction of producers and final consumers in
live-bird markets, which is described as a simple ‘chain’. An important feature of the
poultry marketing system in the traditional system is that traded volumes tend to be
small, averaging 10-50 chickens for a given transaction. However, in the modern
commercial sector, there is an array of small-and large-scale commercial poultry
producers, formal and informal traders, processors, feed millers and exporters as well as
the public as consumers. There is an independent transporters in the commercial poultry
value chain as producers themselves are more often simultaneously operating their own
transport services, including packaging and distribution.

29
Figure 3.4 Value chain mapping for the poultry sector: Source: adapted from GTZ links

The flows of goods and services shown in the above Figure include the inputs to support
modern poultry farms (and, to a lesser extent, small-scale producers) and the various
products and by-products produced by the sector. The value chain map is a generic
mapping of the poultry sector at macro, meso and micro levels. At a macro level, the
actors are limited since major players are predominately in the public sector, mainly from
the Federal Ministry of Agriculture, regional governments and extension service
providers. Their main activity is limited to regulatory aspects of the poultry sector. At the
meso level, larger number of supporting actors to the sector including Regional Bureau of

30
Agriculture, non-government organizations (NGO), cooperative agencies, research
institutes and universities, community-based organizations (CBO) and medium-and
small-scale enterprise (MSMEs) development agencies. Their roles are limited mainly to
the provision of extension services including advisory services and input distribution to
rural poor communities. Micro-level players are the standard actors participating directly
in transactions within the chain itself. The national-level chain involves many players
such as producers, input providers, traders, processors and final consumers

31
 CHAPTER FOUR: INNOVATION AND UPGRADING THE LIVESTOCK
VALUE CHAIN

Upgrading
 the act of improving something (especially machinery) by raising it to a higher
grade (as by adding or replacing components); "their improvements increased the
value of the property
 to assign or promote (a person or job) to a higher professional rank or position
to raise in value, importance, esteem, etc
 In (Agriculture) to improve (a breed of livestock) by crossing with a better breed
 to improve the performance of a computer or other machine by installing better
components or parts.
Upgrading is the process of replacing a product with a newer version of the same
product. In computing and consumer electronics an upgrade is generally a replacement
of hardware, software or firmware with a newer or better version, in order to bring the
system up to date or to improve its characteristics.
Value chain upgrading
Growth and international competitiveness depend on the ability of society to improve
businesses and industries. Upgrading refers to shifting from lower-value economic
activities to those higher values within global value chains using local innovation
capabilities to make improvements in processes, products, and functions (McDermott,
2005).

32
Among the upgrading paths that farmers can choose from, there are quality upgrading, more
efficient production, product and process innovation, non-technological innovations, horizontal
cooperation (co-operatives, associations), the acquisition of certification schemes, reaching new
markets, learning from leading companies through partnerships, etc. Upgrading places a strong
emphasis on innovation (technological and non-technological). Innovation is viewed in a relative
context, how many actors innovate in comparison to competition. If the innovation rate is lower
than the competitors’ one, this results in a reduction in added value and market share (Kaplinsky
& Morris, 2001). Therefore, in the context of global value chains, the upgrading is defined as
innovation to increase added value (Giuliani et al., 2005).
According to Humphrey & Schmitz (2002), four types of upgrading were identified in value
chains:
Process upgrading
Process upgrading, more efficient transformation of inputs into outputs by reorganization of
production systems or introduction of superior technology. Process upgrading: increasing the
efficiency of internal processes such that these are significantly better than those of rivals, both
within individual links in the chain (for example, increased inventory turns, lower scrap), and
between the links in the chain (for example, more frequent, smaller and on-time deliveries). The
need to cut costs and/or increase output in response to intra- or inter-chain competition drives
process upgrading, reducing the per-unit cost of production.
Product upgrading
Product upgrading, moving to more sophisticated production lines in terms of increasing unit
value. Product upgrading: introducing new products or improving old products faster than rivals.
This involves changing new product development processes both within individual links in the
value chain and in the relationship between different chain links.
Functional upgrading
Functional upgrading, the acquisition of new superior functions in the chain, and the increase in
overall skill content or abandoning low value added functions to focus on those with higher
added value. Functional upgrading: increasing value added by changing the mix of activities
conducted within the firm (for example, taking responsibility for, or outsourcing accounting,
logistics and quality functions) or moving the locus of activities to different links in the value
chain (for example from manufacturing to design).

33
Intersectoral upgrading
Intersectoral upgrading, the application of competencies acquired in a specific sector and moving
horizontally to another sector. Intersectoral upgrading is the entry of a firm into a completely
new value chain or industry using knowledge acquired through production of another product or
a specialized service. Intersectoral upgrading typically requires multiple upgrading strategies to
occur simultaneously or in sequence in order to enter the new industry successfully.
Intersectoral upgrading is especially notable as it facilitates a firm’s acquisition of more skill,
knowledge, or technology specific to the new product.

34
CHAPTER FIVE: PROCESSING AND EXPORT OF LIVESTOCK AND LIVESTOCK
PRODUCTS
5.1. Milk Handling and Processing
Milk processing

Traditional Milk Processing in Ethiopia

Can you mention the Ethiopian traditional dairy products and describe the way/schemes of
processing of milk and milk products?_________________________________________

___________________________________________________________________________

In Ethiopia, smallholder milk processing is based on sour milk mainly due to high ambient
temperatures, consumers’ preference and better keeping quality of sour milk (O’ Mahony, 1988).
Throughout the world and particularly in countries with a developing dairy industry milk of
several mammals is processed by traditional methods into varieties of products for immediate
consumption or for later use during times of reduced milk production (O’ Connor, 1993). In most
of the tropical countries, a fraction of the total milk production enters the formal processing
channel because the market is not within easy reach for delivering fresh raw milk and local
processors, if any exist, are constrained to take milk in excess of processing ability. Thus small-
scale processing becomes appropriate in situations where transportation is a constraint,
marketing surplus milk is limited or immediate neighborhood demand is low.

In many countries there exist several traditional milk products whose processing techniques and
technologies are handled down from generation to generation through demonstration and
experience. However, most of these products have a comparatively short shelf life and loss of
valuable milk nutrients often occurs particularly during periods of high milk production. The
small quantity of milk produced by the majority of the rural households in the traditional system
is usually processed into butter and cottage cheese by the farm household and sold to traders or
other consumers in the local markets. Processing milk into such stable and marketable products
could generate cash income for smallholder producers in rural areas, and enable them to
conserve milk solids for sale and consumption in times of scarcity. Better milk processing and
favorable milk pricing policies could encourage smallholders to produce more milk.

35
Sour milk (Ergo)

In Ethiopia, dairy processing is generally based on Ergo (Ethiopian fermented milk) where the
fermentation is natural, with no defined starter cultures used to initiate it. Raw milk is left either
at ambient temperatures or kept in a warm place to ferment. The souring is brought through the
proliferation of the initial milk flora. The traditional dairy products such as butter, cottage type
cheese and other local varieties of dairy products are manufactured from sour milk.

The natural fermentation of milk exploits lactic acid producing streptococci and lactobacilli
which generally suppress spoilage and pathogenic organisms. Fermented milk is reported to
have a storage stability of 15 to 20 days at a temperature of 16 to 18oC (O’ Connor, 1994). Any
milk held at room tropical temperature quickly turns sour as bacteria convert the lactose to lactic
acid.

Butter

Butter is an emulsion of water-in-oil and it contains 80 percent of fat, 16 percent water, 2 percent
salt and 2 percent other solids. Butter making is a very important process in many parts of Africa
and countries with a developing dairy industry. In Ethiopian, butter is traditionally made from
sour milk (Ergo). Milk for churning is accumulated over several days by adding fresh milk to the
milk already accumulated by using different types of storage equipment such as clay pot and
gourd. The churn may hold up to 20 liters and the amount of milk churned ranges from 4 to 10
liters. Butter is made by agitating the milk until butter grains form. The churn is rotated slowly
until the fat coalesces into a continuous mass. The butter thus formed is taken from the churn and
kneaded in cold water (O’ Connor, 1994).

Different types of churn are used in Ethiopia such as clay pot and gourd (Alganesh, 2002;
Lemma et al., 2004). However, the techniques of churning differ from place to place depending
on the size and make of the churn. Different reports available as to the methods of butter making.
According to some earlier report, four different methods of butter making have been identified in
the Ethiopia highlands: 1) the churn is placed on the floor, on a soft pad of material such as sheep
skin or straw, tilted at an angle of 75 to the horizontal, and rocked back and forth; 2) the churn is
hung on a tripod or door post and swung to and fro; 3) the churn is rocked on the lap, and 4) the
churn is shaken with both hands. But, Zelalem and Ledin (2001) identified three different butter

36
making methods in the central highlands of Ethiopia: 1) sour milk is agitated by placing the
churn (clay pot) on the floor and rolling it back and forth; 2) sour milk is stirred with mesbekia
(stick with three to six finger like projections at one end) by inserting it in the sour milk inside
the clay pot and using the palms of both hands to rotate the stick. In this case the clay pot is not
moved; 3) the sour milk is initially stirred for some time with a mesbekia and the agitated by
rolling the sour milk in the clay pot back and forth until butter grains form.

Fig.1. Traditional butter churning in a gourd Fig. 2: Traditional butter churning in a clay pot

Cottage type cheese (Ayib)

Cheese is made in almost every country of the world and there exist more than 2000 varieties. It
is an excellent source of protein, fat and minerals such as calcium, iron and phosphorus, vitamins
and essential amino acids and therefore, it is an important food in the diet of both young and old
people. In most cases traditional cottage cheese is made from buttermilk in Ethiopia.
Alternatively, it can be also made from skim milk (O’Connor, 1994). The buttermilk or skim
milk is poured into a clay pot and warmed under low heat to about 500C (O’Connor, 1993) until
a distinct curd mass forms and floats over the whey. After gradual cooling, the whey is poured
out and the cottage cheese remains in the pot. Alternatively, the cheese can be taken out from the
pot and the whey remains.

The composition of cottage cheese which varies considerably from smallholder to smallholder is
about 76 percent water, 14 percent protein, 7 percent fat and 2 percent ash. The yield of cheese

37
depends on the composition of the milk and the final moisture content of the cheese but generally
one kilogram of cottage cheese can be obtained from about nine liters of buttermilk or skim milk.
Its shelf life is about two days at about 30oC. But if it is kept at 4oC, it is about seven days
(O’Connor, 1993).

Ghee

Ghee also known as clarified butter oil can be prepared from butter or cream by direct heating to
110-1200C. Ghee can be stored more easily than butter in the absence of refrigeration. This is
circumvented by heating the butter in order to remove as much water as possible by evaporation.
In Ethiopia, butter, which is traditionally made from churning of sour whole milk, is a basis of
melted butter which is prepared by melting either fresh butter or rancid butter and exclusively
made for home consumption. The resulting product, called “ghee”, consists of large butter fat
crystals, suspended in liquid milk fat. The water content should be less than one percent.

When the butter is melted powdered spices are added either directly or enclosed in a small cloth
bag (FAO, 1990). The same study indicated that, spiced butter has 17.2% moisture, 81.2 percent
fat, 1.3% protein and 2.1% ash with keeping quality of two months. During ghee making,
different spices were used in different and unknown preparations and amount (Alganesh, 2002;
Lemma et al., 2004). According to these authors ghee can be preserved for about 3.3 years if
kept clean.

Industrial Processing of Milk

To convert milk into different products the whole milk is separated into skim milk and cream
using cream separator. This is known as ‘‘creaming’’. The creaming process can be used to
remove fat from milk in a more concentrated form. Products such as butter, hard cheese, yoghurt,
powdered milk, UHT- milk, and pasteurized milk are produced at industrial level using standard
procedures.

Industrially processed fermented milks include cultured buttermilk made by use of mesophilic
starter cultures, and yoghurt which is made using a thermophilic lactic starter culture of two
lactic acid bacteria species: Streptococcus thermophilus and Lactobacillus bulgaricus. These

38
consumers provide a niche market for industrially fermented milk and a fraction of this market
can be captured by small-scale processors. This, however, would require that fermented milk
products be processed hygienically in order to guarantee safety and consistent quality

Common operations in dairy processing

Do you have any idea about common operation performed in dairy processing?
______________________________________________________________________________
________________________________________

Straining, filtration, clarification

These are a process of removing visible foreign matter, which may get into the milk during
production and handling of milk by use of filtering media. They improve the aesthetic quality of
milk. Filtration removes suspended foreign particles/matters by the straining process, while
clarification removes the foreign particles by centrifugal force/sedimentation. The materials
retained on the filter cloth include suspended foreign particles, milk fat, proteins, leucocytes and
bacteria.

The general features of filters used are:

 A filter cloth or pad of different pore size, which can retain the smallest particles.

 A frame or support to compress and hold the margins of the cloth or pad so that milk can
pass only through pores.

 A perforated metal or other support for cloth or pad which will not tear or break under the
pressure of milk.

Pasteurization

Pasteurization is the most common process used to destroy bacteria in milk. In pasteurization, the
milk is heated to a temperature sufficient to kill pathogenic bacteria, but well below its boiling
point. This also kills many non-pathogenic organisms and thereby extends the storage stability of
the milk. Numerous time/temperature combinations are recommended but the most usual is 720C
for 15 seconds followed by rapid (less than 2 minutes) cooling to below 100C. This is normally

39
referred to as High Temperature Short Time (HTST) treatment and this followed by rapid (less
than 2 minutes) cooling below 100C. It reduces the microbial counts of milk for cheese making.
Cream is also pasteurized before tempering for butter making in some factories. For batch
pasteurization, fixed quantities of milk are heated to 630C for 30 minutes (Low Temperature
Long Time (LTLT)).

Effects of pasteurization on milk

It reduces the cream layer, since some of the fat globules membrane is denatured. But it does not
reduce the fat content of milk. It inhibits clustering of fat globules.

It has little effect on the nutritive value of milk, as the major nutrients are not altered.

It kills many fermentative organisms and pathogens but putrefactive microorganisms survive
pasteurization. Although pasteurized milk has storage stability of 2-3 days, subsequent
deterioration is caused by the putrefactive organisms.

Sterilization

In pasteurization, milk receives mild heat treatment to reduce the number of bacteria present. But
in the case of sterilization, milk is subjected to severe heat treatment that ensures almost
complete destruction the microbial population. The product is then said to be commercially
sterile. The Time/Temperature treatments of above 100 0C for 15 to 40 minutes are used. The
product has a much longer shelf life (several months) than pasteurized milk. Another method of
sterilization is Ultra high temperature (UHT). In this system, milk is heated under pressure to
above 1400C for 4 seconds. UHT sterile the product, moreover, it retains more of the properties
of fresh milk than conventionally sterilized milk.

Homogenization

The main characteristics of homogenization process is the breaking down of fat globules in a
homogenizer, thereby reducing their average size, thus preventing the fat globules from rising
during storage and forming a cream layer. Milk is forced to pass through a small hole/narrow
opening at a pressure of 250 atm. which results in the fat globules breaking. Since milk fat must

40
be in a liquid form state to be homogenized, the product that enters the homogenizer should be at
a temperature of at least 400C.

Cream separation

The fat fraction separates from the skim milk when milk is allowed to stand for at least 30 to 40
minutes. This process is known as creaming. A number of methods are employed to separate
cream from milk.

A. Gravity separation: Cream can be separated from milk by allowing the milk to stand in a
cool place. This can be done in either of the two ways.

i) Shallow pan method: Milk preferably fresh from the cow is poured into a shallow pan 40 to
60 cm in diameter and about 10 cm deep. The pan is kept in a cool place and after 36 hours
practically all of the fat capable of rising by this method will have come to the surface, and the
cream is skimmed off with a spoon or ladle. The skim milk usually contains about 0.5 to 0.6%
butterfat.

ii) Deep setting method: Milk preferably fresh from the cow is poured into a deep can of
smaller diameter. The can is placed in cold water and kept as cool as possible. After 24 hours the
separation is usually complete. The skim milk is removed through a tap at the bottom of the can.
Under optimum conditions, the fat content of the skim milk averages about 0.2 to 0.3%.

B. Centrifugal separation: Gravity separation is slow and inefficient. As compared to gravity

separation centrifugal separation is quicker and more efficient leaving less than 0.1% fat in the
separated skim milk as compared to 0.5 to 0.6% after separation. It allows removal of cream and
recovery of the skim milk in a fresh state. The separation of the cream from the milk in the
centrifugal separator is based on the fact that when liquids of different specific gravities revolve
around the same center at the same distance with the same angular velocity, a greater centrifugal
force is exerted to the heavier liquid than on the lighter one.

Standardization of milk and cream

If adjustment of the fat content of cream is required or if the fat content of whole milk must be
reduced to a given level, skim milk must be added. This process is known as standardization.

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Standardization is important to guarantee the consumer a product of constant fat content and to
meet the national and international standards of the fat content destined for the manufacture of
various milk products. In most cases, the fat content of the raw milk is higher than the required
standard. Standardization can be accomplished by direct method- separating whole milk to
achieve the required fat and by indirect method- mixing whole milk and skim milk or cream and
skim milk. The usual method of making standardization calculation is the Pearson’s Square
techniques.

3 Meat Processing

In your view, what is the importance of meat processing?

Meat processing involves a wide range of physical and chemical treatment methods, normally
combining a variety of methods. These treatments go beyond the simple cutting of meat into
meat cuts or meat pieces with subsequent cooking for meat dishes in order to make the meat
palatable.

Physical/technical processes such as:

 Cutting, chopping, comminuting

 Mixing, tumbling

 Stuffing/filling of semi-fabricated meat mixes into casings, synthetic films, cans etc.

 Heat treatment

On the other hand, chemical or biochemical processes, which often go together with the technical
processes, are also part of meat processing technology such as

 Salting and curing

 Utilization of spices and additives

 Smoking

 Drying

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Uses of Processing

 The advantage of meat processing is the integration of certain animal tissues (muscle
trimmings, bone scraps, skin parts or certain internal organs which are usually not sold in
fresh meat marketing) into the food chain as valuable protein-rich ingredients.

 Animal blood, for instance, is unfortunately often wasted in developing countries largely
due to the absence of hygienic collection and processing methods and also because of
socio-cultural restrictions that do not allow consumption of products made of blood.

 While half of the blood volume of a slaughtered animal remains in the carcass tissues
and is eaten with the meat and internal organs, the other half recovered from bleeding
represents 5-8 percent of the protein yield of a slaughter animal. In the future, we cannot
afford to waste such large amounts of animal protein.

 Meat processing offers a suitable way to integrate whole blood or separated blood
fractions (known as blood plasma) into human diets.

 All edible livestock parts that are suitable for processing into meat products are
optimally used. In addition to muscle trimmings, connective tissue, organs and blood,
this includes casings of animal origin that are used as sausage containers.

 Lean meat is one of the most valuable but also most costly foods and may not regularly
be affordable to certain population segments.

 Unlike fresh meat, many processed meat products can be made shelf-stable. Such shelf-
stable meat products can conveniently be stored and transported without refrigeration
and can serve as the animal protein supply in areas that have no cold chain provision.

 Meat processing “adds value” to products. Value-added meat products display specific
flavour, taste, colour or texture components, which are different from fresh meat. Such
treatments do not make products necessarily cheaper; on the contrary in many cases they
become even more expensive than lean meat. But they offer diversity to the meat food
sector, providing the combined effect of nutritious food and food with excellent taste.

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Salting

The water holding capacity of meat can be increased with the addition of salt up to a
concentration of about 5% in lean meat. Sodium chloride has only a very low capacity to destroy
microorganisms, thus almost no bacteriological effect. Its preserving power is attributed to the
capability to bind water and to deprive the meat of moisture.

The preservation effect, which is microbial inhibition and extension of the shelf-life of meat
products by salt in its concentrations used for food (on average 1.5-3% salt), is low. Meat
processors should not rely too much on this effect unless it is combined with other preservation
methods such as reduction of moisture or heat treatment.

Curing

Curing is the treatment of muscle meat with common salt (NaCl) and sodium nitrite (NaNO2). In
order to achieve the desired red or pink color, meat or meat mixes are salted with common salt
(sodium chloride NaCl), which contains a small quantity of the curing agent sodium nitrite
(NaNO2).

Smoking

Smoke for meat treatment is generated through the thermal destruction of the row wood
components lignin and cellulose. The thermal destruction sets free more than 1000 desirable or
undesirable firm, liquid or gaseous components of wood.

Depending on the product, smoke is applied at different temperatures. There are two principal
smoking techniques:

1. Cold smoking

2. Hot smoking

The principle of both methods is that the smoke infiltrates the outside layers of the product in
order to develop flavour, colour and a certain preservation effect.

Meat Drying

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Drying may be done for the single purpose of dehydrating fresh meat for extension of storage.
To have an extended shelf life, fermented products need to lose moisture during their
fermentation, they are dehydrated or “dried” to a certain extend.

Drying and fermentation must go hand in hand to achieve the desired flavour and shelf life. The
drying of such products is mostly done in climatized chambers with exact temperature and
humidity parameters.

Another example is the drying of meat preparations in ovens with temperatures in the range of
70-80°C, to become fast-dried products such as beef sticks formed of ground, salted and
flavoured meat.

It is still a popular method in many developing countries, in particular where no cold chain is
available. It is predominantly carried out for meat preservation, based on the experience that
dehydrated meat will not spoil easily.

Meat Canning

Unlike pasteurized “cooked” meat products where the survival of heat resistant microorganisms
is accepted, the aim of sterilization of meat products is the destruction of all contaminating
bacteria including their spores. In practice, the meat products filled in sealed containers are
exposed to temperatures above 100°C in pressure cookers. Temperatures above 100°C, usually
ranging from 110-121°C depending on the type of product, must be reached inside the product.
Products are kept for a defined period of time at temperature levels required for the sterilization
depending on type of product and size of container.

The canning process involves two essential operations:

 The product must be heated at a sufficiently high temperature and for long enough to
make it fully or commercially sterile, and

 It must be sealed in a hermetic container which will prevent recontamination of the

product.

Usually heat processes for canned products are designed to inactivate large numbers of spores of
the organism Clostridium botulinum.

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Poultry meat processing
During the first part of the 20th century, poultry was sold live to consumers who did their own
processing. In the 1930s, only the blood and feathers were removed. As consumers demanded
more convenience, the market grew for eviscerated or ready-to-cook (RTC) birds.
Producing ready-to-cook poultry involves:
 Pre-slaughter: catching and transport
 Immobilizing, killing, and bleeding
 Feather removal: scalding, picking
 Removal of head, oil glands, and feet
 Evisceration
 Chilling
 Cut-up, deboning, and further processing
 Aging
 Packaging
 Storage
 Distribution

Egg processing
Egg Processing Systems
In-Line Processing
Egg processing occurs at the same location as the egg production facility. This processing
method is the most efficient egg collection and processing of eggs available. Eggs are delivered
from the egg production facility to the egg processing facility by an enclosed and refrigerated
conveyor system. Egg handling and processing is performed with automated equipment.

Off-Line Processing

Egg processing occurs separate from the egg production facility. This processing method utilizes
satellite farms. Satellite farms are egg production facilities that are located at a different location
from the egg processing facility. Eggs produced at satellite farms must be gathered and delivered
to the egg processing facility. Egg handling and gathering is performed with automated
equipment. Care of eggs on the farm Regardless of on-line or off-line processing, steps are taken

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to maintain egg quality on the farm. These include, but are not limited to, egg collection
occurring several times daily, careful egg handling procedures, egg cooling, egg cleaning, and
use of clean packaging materials.
Processing Functions
 Cleaning the Eggs
 Washing in warm water with a mild detergent in order to remove any contaminants
(manure, grease, blood, yolk, etc.) before they are sold for human consumption.
 Eggs are dried to remove excess moisture prior to packaging.
 Removal of contaminants prevents egg spoilage by bacteria.
 Eggs that are not cleaned or contain defects are removed from the processing line and are
not packaged for human consumption.
 Grading
 Grading refers to the process of grouping eggs according to similar characteristics, such
as quality and weight.
 Egg grading is dependent upon examination of internal quality factors (e.g., condition of
the egg white and yolk, air cell size).
 Internal quality factors can also be determined by candling.
 Egg grading is also dependent upon external quality factors (e.g., shape, texture,
cleanliness, and soundness of the shell).
 An egg with a AA grade contains the most desirable characteristics while an egg with a B
grade contains the least desirable characteristics.
 Size Determination
 Sizes are determined by weight. There are six different weight categories: peewee, small,
medium, large, extra large, and jumbo. Each size category receives a different price on
the farm as well as at the retail level.
Packaging

 Eggs are packaged into a variety of containers designed for safe shipment and enhanced
product appearance for the consumer.
Care and Handling
 Refrigeration

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  Eggs must be cooled to a core temperature of 45 ˚F.
 Eggs held prior to processing must also be cooled.
 Mechanical Handling
 Eggs are moved using conveyor systems between the production facility and the
processing plant.
Labeling
 Sell by Date
 Every individual package of eggs processed must contain a sell by date that is set from
the date of processing.
Plant Code
 A code is printed on every carton produced in a processing plant. Each plant has its own
individual code so that if there is a need to find the origin of the finish product, it can be
traced all the way back to the processing plant.

Livestock Export performances

In Ethiopia, both legal and illegal livestock marketing systems are operating at different
magnitudes. Small farmer exporters and traders are the major actors in the illegal cattle
marketing system while medium- to large scales licensed exporters are dominantly operating in
the legal system. Most cattle sales are related to farm households’ cash needs and commercial
orientation. However, cattle sales are also induced by fear of theft and insecurity. Unofficial
cross-border trade is practiced in the eastern, western, and southern, and north western
borderlands of Ethiopia. In addition to the Ethio-Sudan cross-border huge livestock trade, there
are other important cross-border livestock trade operations: Ethio-Somalia, Ethio-Kenya and
Ethio-Djibouti. The cross-boarder trade with Sudan involves predominantly male cattle. Un-
castrated and fattened oxen are also exported legally. Few medium to high quality female
animals are also exported, which are used for slaughtering in Sudan or for live animals re-export
to Egypt, Libya and Yemen. Most of the borders are characterized by arid and semi-arid agro-
ecologies where livestock play dominant role in household livelihoods. Eastern
Ethiopian/Somaliland cross-border livestock trade accounts for the largest share among the four

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borders in terms of the volume and value of export from Ethiopia. Port of Berbera is the main
outlet for livestock exports.

. Figure Existing beef cattle sources and market channel of livestock trade in Ethiopia.

The Figure illustrates that beef cattle is brought to market primarily from three sources: from
farmers which produce the beef cattle, small scale to large scale producers organized in the
form of cooperatives to fatten the cattle and some brokers which buy either from directly from
producers and fattening cooperatives. Those animals brought to the market are exported legally
by small and medium scale exporter and illegally by small scale exporter and farmers.

Estimating livestock export performance

There are few legal exporters engaged in the export of live animals and meat in the country.
These exporters secure livestock from pastoral areas by themselves or through agents for export
in live or meat form (chilled mutton, goat meat and beef). The Livestock Marketing Authority

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(LMA) (2004) estimated the annual potential for export at 72,000 metric tons of meat. NEPAD-
CAAD (2004) identified the Middle East and North African countries which are considered
important for the country’s export in livestock and livestock products (LLP) to be Saudi Arabia,
United Arab Emirates, Bahrain, Yemen, Jordan, Kuwait, Oman, Qatar, Iran, Syria and Egypt.
The annual demand of these countries is estimated to be 206,846 tons of meat and 12 million
heads of live animals (cattle, sheep and goats). The estimated national off take rates of 10% for
cattle, pastoral areas of the country alone, could produce 734 000 heads of beef cattle per annum.
When these are compared to the current demand in the Middle East, they meet only 42% for
beef. However, the live beef cattle supplies are well over the demand (144%), thus requiring new
market outlets.

The exports of meat and live animals have dramatically increased in 2010-2011 Ethiopian fiscal.
Ethiopia exported 16,877 tons of meat and 472,041 head of live animals, recording a 69 %
increment from last year’s export revenue. Ethiopian revenue and customs authority reported that
live animal export in 2010 contributed 70% of the earnings while 30% was obtained from meat
export. Chilled sheep and goat carcass accounted for 80%, beef 9% and offal 11% of the
exported meat. Of the number of exported live animals, cattle accounted for 46%, sheep 35%,
camels 13% and goats 6%. In terms of revenue, cattle contributed 67%, camels 25% and sheep
and goats 8% to the revenue generated

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