Egg producers are hoping that the weather aberration's adverse outcome would only stay for a brief period since the rainy season which begins this June is seen to cool down the layers' environment which has suffered immensely from the severe hot weather.  But breeders believe the prolonged drought has already inflicted casualties which will definitely have an impact on production throughout the year.

 

 

 

The Bureau of Agricultural Statistics (BAS) has reported a 4.43% gain in chicken egg output in the first three months of 2010 due to increased inventory of layers in Central Luzon, CALABARZON, Central Visayas and Northern Mindanao while value has registered a 3.11% increment at PHP8500.94 million (US$1.8 million) from yearago's PHP8224.58 million (US$1.7 million).  In this period, the BAS has not included the months of April and May when extreme heat, at some days, has reached at 40ºC.  "Before, layer birds can tolerate the heat but now, they are dying on heat stroke because of the severe scorching weather.  The abnormally high temperature has affected the eating pattern of the birds. Before, feed consumption was 110 grammes, now it is less than 100 grammes. They can't even properly drink because even the water is hot." laments Greg San Diego of the National Federation of Egg Producers of the Philippines.  While feed cost component is already at PHP2.50 (US$0.54), San Diego said farmgate prices of small eggs per piece are only priced at less than PHP3.00; medium sized eggs are PHP3.40 to PHP3.50; and the large ones at PHP3.70. "Farmers are already at a loss," he said. "We used to enjoy a production peak of 96%, now even 90% is already impossible to achieve because of the El Niño."  San Diego is grateful that soymeal and corn prices are stable but he fears that the usual erratic pattern of feed prices based may negatively impact layer production this year.

 

Moreover, electricity costs which are usually high during the summer months due to wide use of aircondtioning units and other cooling equipment have tripled this year.  San Diego tells of one layer breeder who temporarily stopped breeding due to dizzyingly high cost of power rates. "They were using the modern CCS or climate control system to ease the effects of the summer heat. Even in Malaysia, seldom you would see raisers using this equipment because this is expensive and this is the newest technology used in layer breeding. In CCS, you are using bigger than the usual fans of the automated ventilation. So when they stopped the use of CCS and eventually their production, I asked them and they said they may not be able to recoup due to high power rates," he said.

 

San Diego said CCS is recommended for broilers since the equipment will only be used for thirty days until they are well-brood. But in layers, CCS is a necessity since the birds are laying eggs daily.  "However if the electricity rates are too high, its useless not because the CCS isn’t good or advisable but production costs will be really high, there would be no profit at all" tells San Diego. 

 

Other farmers have resorted to second-rate equipment like blowers to ease the heat but the ventilation it gives is also humid, plus it also uses electricity. "That's our biggest problem now, the power rates. We are also concerned on how to market our eggs because the prices are too low. I think we have now is not just double whammy but a triple whammy," complains San Diego.

 

San Diego admits that the situation may improve since the rainy season has already begun. "Breeders who lost their birds to heat stroke may not eventually recover. But once the weather improves, I hope things would change. Actually we're concerned about the price, we do not know yet if there will be problems in production throughout the year. We have to wait and see."

 

 

 

Fortunately, as far as the layer industry is concerned, the perceived hostile effects of the Asean Free Trade Agreement haven’t made much of an impact. By far, San Diego tells that there have been no imports or significant foreign shipments within the Southeast Asian region that could have been a cause of worry. Instead, San Diego thinks AFTA has become beneficial because corn producers could not immediately jack up prices as they used to. In fact, there will be possibility that livestock producers may import cheaper corn which would translate to lower production costs. But what's troublesome is the free trade pact between the Asean countries and China. The propaganda mills, especially in Beijing, are trumpeting that China-Asean Free Trade Agreement (CAFTA) will bring "mutual benefits" between China and the Asean region and is said to produce a combined gross domestic product of US$2 trillion and total trade of US$1.3 trillion. More than 7,000 products from China and Asean will become duty-free.

 

The government has been harping that the FTA would form a "formidable regional grouping" that would rival that of the US and the EU.  According to economists, at first glance, the CAFTA has been positive as the growing Chinese economy in breakneck pace has been key factor of Southeast Asia's economic growth beginning 2003. During the international recession, Asean governments are relying on China's economy which is expected to grow 7 to 9 percent in 2009.

 

However, pundits claim that China's growth is in fact taking over Southeast Asia. According to economist Walden Bello, low wages in China may encourage investors to phase out their operations in high-waged Southeast Asia. He said that China's devaluation of yuan in 1994 had the effect of diverting some foreign direct investments away from Southeast Asia and the trend of Asean losing ground to China accelerated after the financial crisis of 1997. Bello said that in 2000, foreign direct investment in Asean shrank to 10% from the high 30% during the 1990s and the United Nations reported that the decline continued partly due to "increased competition from China."

 

In every aspect, Bello surmises that China will be the ultimate winner in CAFTA, be it labour and technology as the country is clearly "super-competitive" that even economic giants Japan, US and Europe have been generally wary of the rapid economic growth of the world's most populous nation.

 

For the Philippines, Bello fears that widespread smuggling will be legalised once CAFTA is enacted since illegal products entering the country mostly come from China.  San Diego has long been complaining of smuggled chicken from China which could bring in the dreaded bird flu menace.

 

Even agricultural powerhouse Thailand is worried about CAFTA, reveals San Diego as China can reproduce goods at a much lower cost and admittedly Thailand cannot compete with China in terms of production cost.

 

Being one of Asean's weaker economies, Bello says the Philippines has already seen itself driven into massive deficit under the scheme. Agriculture will probably share the brunt of the discrepancy, according to analysts.

 

However, all hopes are high as the country is prepping up for the new administration in July under Senator Benigno "Noynoy" Aquino III. Philippine stocks increased by 4.1% in May when polls resulted to Aquino -  the only son of Filipino democracy heroes Corazon and Ninoy Aquino - being the clear winner in this year's presidential elections. San Diego says that once Aquino is being proclaimed, he is positive that business activities would also perk up, including the food sector. "We are confident of the things to come, evident of the stockmarkets jumping when Aquino was leading the presidential race. That means Aquino is widely accepted as the new leader of our country. Although the decline of Greece's economy has affected us in a sense that the peso has also devaluated, we are optimistic that things would turn out fine."