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SHW 3001

PRINCIPLES OF LIVESTOCK
PRODUCTION
BEEF CATTLE PRODUCTION:
SWOT ANALYSIS

By: Wan Ahmad Farhan bin Wan Ahmad Shabri


…….Zainuddin (180123)
Fan Jia Quan (183558

Lecturer: Dr. Iswan Budy bin Suyub


INTRODUCTION AND PROBLEMS
STRENGTHS

Secure, established markets

The market for local beef has always been present, with demands for

consumption, besides being used in food industries for meat based products such as
Ramly Burger.

High demand for fresh local beef

There is a high demand for locally produced beef as the locals prefer meat that
is fresh, compared to those which are chilled or frozen. Some people also prefer the

taste of local beef compared to Australian or New Zealand beef which have their own
distinctive taste.

Established credibility and confident among consumers of halal food

Malaysia is already known as a halal hub, which gives good reputation to


products exported to overseas, especially Islamic countries.

Location advantage

Malaysia is strategically placed in South East Asia, which is between the East

and the West. This eases export to countries such as Europe, China, and others. This

also helps to reduce transportation cost.

Veterinary infrastructure

Malaysia’s veterinary infrastructure is of high quality, which ensures efficiency


in beef cattle production.

Industry controls and procedures

Several regulations have been set for national beef production. For example,
halal requirements and guidelines ensure cleanliness and safety.
High per capita consumption

Malaysians consume a lot of meat, after poultry and fishes. Many of the local

cuisines whether it is Malay, Chinese, or Indian use beef in its preparation.

National and local government support

The government is highly investing its efforts in ensuring enough beef cattle

production for the country. This can be seen through efforts like allocating lands for
specific livestock rearing usage, and the recently launched napier grass planting

nitiative as livestock feed.

Foreign investment in supply chain

Several foreign companies also have set up their businesses in Malaysia, and
have grown large and contributing greatly to the local production of beef cattle. One

example is Charoen Pokphand (CP).


WEAKNESSES

Shortage and difficulty in obtaining high quality, high yielding breeders

Several local breeds such as Kedah-Kelantan is not capable of producing the

optimal amount of beef for consumption due to its low genetic capabilities. Some
efforts have been done to cross breed them with beef cattle species such as Brahman

from India. However, the production of high quality and high yielding breeders are still
low.

Farm labour and expert shortage

Workforce and labour for livestock production in Malaysia is severely lacking,


due to the younger generations preferring professional occupations such as doctors,

lawyers, and engineers. Experts in veterinary required for beef cattle production is
lacking in numbers. One expert may need to supervise and give advices to many farms

at once, making their advises quite general instead of being focused and specific.

Lack of land for cattle project site

Even though the government has allocated several lands for agricultural use

and livestock production, the numbers are still low due to lands being used for
property development, besides some lands being left barren and undeveloped.

High start up cost

A lot of money is required to set up a beef cattle production facility. Examples


include in setting up the rearing houses, slaughter facility, and storage for feed and

equipment. Freight cost for transporting beef is also expensive.

Low sustainable production due to lower reproductive performance

Local breeds cannot produce offspring as much as other countries such as


Australia. They also take longer time for recovery between parturition and breeding.
Slow operating durations and returns

This is mainly on small investments, due to economic of scale and efficiency issues.

Small farms are only capable of producing beef cattle for a certain period of time, and
cannot fulfil a long-term requirement, especially those imposed by countries such as

Singapore.

Weather and climate

Malaysia’s weather is hot and humid, which stresses animals causing them to be

thin besides refusing to eat, thus low production. This is more prominent of oversea
breeds which prefer cool climate and better quality forages.

Need to comply with Australian government regulatory impost

Countries such as Australia or New Zealand are very strict in their import

procedure, where all cattle should be free from any diseases. They also must pass
physical inspections.

Low processing level

Several slaughterhouses are not capable of producing meat as fast as


demanded. This leads to shortage of supply.

Need to comply with Australian government regulatory impost

Countries such as Australia or New Zealand are very strict in their import
procedure, where all cattle should be free from any diseases. They also must pass

physical inspections.

Dominance of unorganised and fragmented industry players

Many farmers are involved in small scale, besides the lack of cooperation

between them. They set their own prices, affecting the market price for meat.
OPPORTUNITIES

Doubts on origin and halal status of imported beef

Some imported beef, especially from India was found to be buffalo meat. Some

people are also concerned on the validity of halal status due to absence of halal logo,
thus their decision to buy locally produced beef instead. Some of them even prefer to

slaughter the cattle themselves.

Population growth

Malaysia’s population is rapidly increasing, due to high quality of life and great

health being factors encouraging marriage and raising children. Furthermore, with
expatriates and workforce immigrating into the country for education and construction

purposes, the number will continue to increase. They will buy local foods, several of
them using meat such as curries and barbecue.

Halal market potential

Halal market has a huge potential due to increasing number of Muslim


population in nearby Islamic countries such as Indonesia, Brunei, and Singapore. The

beef cattle produced here can also be exported to Middle Eastern countries.

Guidance from authorities

The government have set up several authorities responsible for managing and

advising cattle producers. For example, Veterinary Department offers advices on health
and disease management. Ministry of Agriculture and RISDA also has staff doing

extension practices and produces manuals on smallholders beef cattle production.

Extend supplier range

There is still room for suppliers to improve themselves and make deals with
oversea companies. The range can be extended worldwide compared to the current

regional supply chain.


Develop a breeding capacity in Malaysia with heifers sourced from Australian

operations

Beef cattle can be locally produced, instead of importing them from overseas.

Expansion of production facilities

With enough capital injection from foreign and local investment, besides a

proper cashflow, the production facilities are viable for expansion. More lands and
machinery can be acquired.

Value addition and diversification of product offerings

Besides the usual fresh, raw beef, companies can adopt a top down approach

where they also produce several meat based products. Examples of companies using
this approach are Charoen Pokphand and McDonalds.

Changing consumption pattern

More and more Malaysians are eating meat based products as their quality of
life improve and they can afford it, compared to being stuck between fish and poultry

in the past.

Innovative marketing approach

Malaysians tend to market products online, reducing costs for traditional

marketing through televisions and newspapers. It also has a worldwide reach at


minimal cost. Examples include Facebook, Instagram, and Twitter. The impact is much

higher now with the introduction of Digital Free Trade Zone (DFTZ) by the government.

Better utilization of by-products

Waste materials from rearing beef cattles can be used as agricultural fertilizers,

besides unwanted food by humans can be used as feed material.


THREATS

Rising prices of meat products

The high costs of production especially for feed materials, is causing price of

beef products to be more expensive compared to fish based or poultry based products.

Competition with cheaper imported beef

Some beef imported from Indonesia are much cheaper, which affects selling of

locally produced beef.

No uniformity on standards

Several differing standards in local beef cattle production can affect the quality

and texture of meat produced which will also affect people’s perception of local beef.

Threats of diseases

Several existing diseases such as Foot and Mouth Disease (FMD) and mad cow
disease is impairing local production capabilities, as infected cattles are needed to be

quarantined.

Cattle supply and price

Cattle supply can be low at times of drought and natural disasters, thus

increasing their price. Inflation also affects their price greatly compared to several years
ago.

Exchange rate

Fluctuating exchange rate can be a problem, especially when exporting to other


countries with higher rates.

Increased competition from nearby countries

Nearby countries such as Indonesia and Thailand also have increased their
efforts in beef cattle production, especially in producing high yielding cattle breeds.
High imports

Malaysia is too dependent on imports to fulfil the nation’s requirement for beef.

If natural disasters or trade sanctions occurs, it is unlikely for us to maintain a


sustainable beef production. Food security will be impacted.

Supply disruptions during festival and holiday seasons

Super high demands during festivals such as Hari Raya Aidilfitri and Aidiladha,
Chinese New Year, and Deepavali can cause supply disruptions, causing producers

unable to meet local demands, besides export demands from overseas.


CONCLUSION