Conference nyoss1::market_investing

    Interesting investment vehicle.  I recently saw a brief newscast, on
    ostriches as an investment.
    Any idea what it cost to start an average ostriche farm? Is South
    Florida a good location for a farm? 
    
    Rick

    
    	Re: .0
    
    	Thanks for reminding me of this.  Now that you've been in it for a
    while, can you summarize your to-date costs and potential selling prices
    of your flock?
    
    							-craig

    
    Just a curiosity question.  What kind of market is there for these
    birds?  Who, why etc?
    
    -Kendall

current expenditures for the birds:

sales price	$24K
insurance	  2K
feed cost	  1K (for the four of them)

current market value of the birds are between 60K-70K (no, I'm NOT selling!)

the value of the birds have actually went up over the last year, the chicks
(all birds really) are selling for more per pair than they were a year ago
when we started

for those of you asking why - the ostrich (and some other large birds) has been
S. Africa's best kept secret for over a hundred years (and they've refused
to export as well).

there are several products from the birds:

	feathers
	eggs (infertile)
	meat, red meat like veal, less fat/chol. than white turkey or chicken
	leather from the hide (ostrich boots sell for over $1000)

the current market is still a breeders market, the industry doesn't expect that
to change for about 5-7 years

how much does it cost to get in?

depends on your business plan really, what you want to do.  Some people buy
chicks & sell them later on (like calves, then sell them as yearlings),
others are buying breeders and are raising their own chicks, others are
selling fertilized eggs to hatcherys.

somone asked about Flordia, yes, there are several breeders there as well -
I can send you names if you'd like to talk to some personally.

well, I could write for hours about the industry - thanks for your interest!

mary
 

    This subject reminds me of a story of a man who had a dog he said was
    worth $100,000.  His neighbor responded "Are you kidding ??? $100K ?"
    The man replied "Yes its true, I just traded that dog for two $50K
    cats."
    
    No offense to Mary, just thought it was a cute story.
    
    

    Congratulations on your success, Mary.  Best of luck in the future.
    
    Would you care to estimate hours per day of labor involved?
    And when is the barbecue?  :-)
    
      John

yeah, I know, and I've considered selling one of the hens just to recoup our
initial investment.....(I too was one of those people that held Digital stock
'until it hits 200')

&^)

not much labor, but lots of worry (during blizzards, golf-size hail, etc.)

just feed 'em once a day & make sure they have water, give 'em lettuce &
grapes for treats....

have I grown attached to them??  no, not me!!  &^)

mary

>there are several products from the birds:
>
>	feathers
>	eggs (infertile)
>	meat, red meat like veal, less fat/chol. than white turkey or chicken
>	leather from the hide (ostrich boots sell for over $1000)

I don't understand the economics of this.  Is the demand for these products
so great that the birds are worth thousands?  Or is the market based on
speculation that the demand will increase?  Is this like tulips in Holland
in the 1600's?

    I don't know about the other products but I can verify that
    ostrich leather is expensive.  I have seen boots made of it
    for $1000.

    I figure the price is so high because it's an exotic product
    and can demand a premium price.  If demand increased and the
    production did as well, it would probably loose this status.

    Martin

I first became interested in the ostrich industry while visiting family in
Zimbabwe in April 1990.  On return to the US I joined the American Ostrich
Association (AOA) and attended seminars of theirs in San Antonio and Denver,
and have spoken with many of their members.  I also joined The Ostrich 
Producers Association of Zimbabwe (TOPAZ) and have received regular updates on
the status of ostrich production in Zimbabwe.  Here is what I know.

There is a demand for skins not met by supply, however the current price of
skins is as high as the market will bear.  The price will not go up and in
fact has declined a little in Europe due to the recession.  This according
to TOPAZ.  Current prices are about $600 a skin in Japan.

There is a lot of interest in continental Europe for ostrich meat according to
both the AOA and TOPAZ.  According to TOPAZ, the Japanese, like Americans, are
not as a whole interested in exotic meats.  It is difficult to get a value on
the meat since South Africa does not meet EEC regulation for slaughter houses
so the meat is all locally consumed and no one is really "testing" the market
in Europe.

Feathers comprise of some value, I cannot remember the numbers but I believe 
it is less than 10% of total value.  The best feathers go into the fashion
industry and the rest into feather dusters.

The final value of a processed ostrich in South Africa is about $600 according 
to Mike Englazakis who owns a farm, tannery, and slaughter house.  Given the
price of the skin in Japan against this, there must be some transport and
middleman costs. 

Most ostrich production in South Africa is done by the Klein Karoo Ko-op, an
agricultural co-operative.  According to Jim Carden, who writes for the AOA,
the price "on the hoof" paid to producers is $300, "but once regulation is
stopped, the price will double at least".  Strange statement.

Cost for a breeding pair in the US is $50,000 - in Zimbabwe it is about $4,500.
Cost of a 3 month chick in the US $3,000 - in Zimbabwe about $250.

Incubators are cheaper and better in the US about $3000 for a good 70 egg
capacity.  In Zim they are often home built for about 60% more.

Cost to feed a bird to slaughter age about $300 according to AOA, but I seem
to remember this is at the most expensive option.

Note that Zimbabwe prices are at the "real" exchange rate of ZW$10 = US$1, the
"official" reate is ZW$5 = US$1.

The approach taken by the AOA is that the current market is for breeders, and 
the agricultural market will come in about 7 years.  The AOA is very very anti
the importation of birds.  They claim because of the risk of parasites.  The
benefit of enlarging the gene pool does not seem to matter.  In private
disccussions, and openly at the Denver seminar, it is clear that the real 
opposition to imports is what it will do to the price of birds.  The USDA has
now allowed the importation of birds but quarantine facilities size currently
restricts the impact on the market.

The approach taken by Zimbabwe is that this must be an agricultural product
from the start.  A new tannery has been completed and negotiations are under 
way with the Japanese.  TOPAZ is trying to raise the money to build a 
slaughterhouse to EEC standards, this is difficult because of having to import
components and pay with foreign currency.  There is however a huge local meat
market.  The import of birds is encouraged and exportation is prohibited.

To me the big question is what are the South African doing?  From article I have
been sent from farming magazines they are well aware fo the threat to their
industry, and with current large flocks are in a good position to increase
production.

The skins are a fashion statement, very distinctive and in demand because they
are rare.  When everyone has one nobody will want one.

In my opinion the exotic meat industry is difficlut to be quantified.

Compared to cattle, ostriches are a much better deal for the world.  Of all
animals they grow the fastest.  From a 3 lb egg to a 300 lb adult in 12 - 14
months.  A good pair will produce about 50 eggs a year, 30% to 80% survive
(depending on many factors, but management of the operation is the most
crucial).  With cattle its one at a time.  Ostriches require a fraction of the
land, water, and feed of cattle.  And the meat is more healthy.

What am I doing about it??  Going back to Zimbabwe to farm them.  My goal is
a flock for slaughter to meet local food demands.  Most of the local population
cannot afford beef anymore, and with the constant droughts it is not going to
get any better.  Labor cost are cheap and I believe I can make a living this
way.  I don't believe I can get rich.  If there is still a skin/exotic meat
market great, but it will just be extra.

If I was in Mary's position I would make recouping my investment a priority.
I would then keep at it selling chicks without expanding my breeders and
keep a sharp high on prices.  Just as Digital never hit 200, the breeder
market may not last 7 years.  Who knows if an agricultural market can be
sustained in the US.  Prehaps if meat eating habits really change.  However
I suspect it will take the economies of scale of a large operation to make
it viable.

well, i guess you are serious.  sorry for doubting this, but there was
something amusing about the topic.  but, anyway to make money is
great by me.

are you doing this breeding on your own property --- i.e., the 
ostriches are in your backyard?  or, have you bought into a partnership
that is located elsewhere?

    
    
    I was reading about ostriches in Colorado.
    
    Seems a great side line is renting them out to families with kids. When
    the family wants to go backpacking, they load the kids on the
    ostriches, and heads off. Seems the experience is a lot more fun than
    whiney tired kids.
    
    Something like $60/day per ostrich was being charged.
    
    Simon

re .14:

I thought ostriches are unfriendly.  With a kid on their back, they'd be
downright nasty.  Am I mistaken?

    Male ostriches, especially in the breeding season, are downright nasty. 
    The kick forwards with enough power to kill a man.  The females are
    quiet docile, especially if they have come from South African stock
    which has been domesticated for about 100 years.
    
    I don't know how comfortable they would be to ride for any length of
    time, but in Oudtshoorn, South Africa, they have races with Jockey's in
    silks.

re. 12 - thanks for the information!  that was great!  So when are you physically
moving back to Africia to do your birds?  The price differential between here
and there is amazing!

re.  14  - we have several lamah farms here - is that what you mean?

re. earlier question, we own 60 acres here in Colorado, so the birds are on
our own property.  some people though are paying people to keep and raise
the birds for them (we'll be doing that in a few months for some people
here locally.)

also, I *did* read about someone in Las Vegas who really was raising these
guys in their back yard!

for TINCUP::HOLM, how long have you been involved in this?  Any specualtion
regarding when you think the breeder market will top out & start to decline?

thanks so much for your participation!

mary

    
    
    you know, I was confused between llamas and ostriches, sorry!
    
    Simon

    This whole thing with the birds seems like pretty risky business. Let's
    face it, they're "worth" what you can sell them for, but if there are
    no "consumers" other than other "breeders", some day the public is
    going to wake up with the "hey, wait a minute here ... that's two pair
    of shoes, a purse and 300 pounds of turkey-meat you're looking at, and
    that's what it ought to be worth..."

    Anything beyond their "consumer market value" is at risk. The South
    African price seems much more like where it would all settle out - it's
    just another pyramid marketing scheme.

    I heard someting on NPR the other day that the fastest growing farming
    segment in the U.S. was the raising of Emus. The reasons they gave were
    the relative healthiness of their meat and the relatively low cost to
    raise them.
    
    Isn't an Emu something like an ostrich?
    
    Dick

yes, Emus are like Ostriches.  They are both from the ratite family
(flightless birds), and the whole ratite industry is expanding at
the present time (breeding).  Rheas are also moving quickly in the
market.

Right now, the emus are selling for approximately 50% less than the
ostrich.  They are also USDA approved, in addition to their feathers,
I believe they also use emu leather.  In addition, they have oil
(used in cosmetics) as a by product of their processing.  The
emu, from what I understand, are being farmed commerically in
Austrialia, with their products being sold in that country.  However,
because its still a breeders market, they are worth more alive than
processed.  BTW the EMU is about 50% of the size of the ostrich
(meat, etc.) therefore the differential in the price.

Both the emu and ostrich (haven't seen any rhea ads) are proclaiming
to be the livestock of the future because of the relative cost of
producing as compaired to cattle.

re. .19, risky business.  Yes, it IS risky, the industry needs to continue
to build processing plants, etc. to support the follow on market to the
breeders market.  If they don't, lots of zoos will be getting free ostirch
& emus!

Would like comments from the author of .12 on what hes heard, knows, thinks
about the future of the emus as well.  We're also considering buying and
raising them.  The ostrich lays in the summer season, the emus in the
winter season, with both we'd be producing (and working %^() year around.

thanks.

mary

regarding a pyramid scheme, no, I don't think so.  Anymore so than raising
and selling of any livestock, the important point is that we have a follow
on to the breeder's market.  An issue that the A.O.A. (American Ostrich
Association) and the industry is working very diligently.

mary

How about an update from anyone who has or is still investing, raising, 
or otherwise involved with ostriches?

	I wanted to contact Mary, but it appears that she may no longer be
with Digital... Anyone know how to reach her?

Regards,

  Haven't got a clue.  She is not in the telephone book so maybe she skipped
town.

    There was an ostrich article in _Barron's_ a couple months ago.
    Basically it said this was a risky business since elsewhere in the
    world ostriches and their eggs were priced far, far less than in
    the U.S.  And there seemed to be no bulging domestic demand in the 
    near future...
    
    OSTR is trading at 3�, probably on its way to 0.
    
      John (then again, I could be wrong :-)

    Mary has indeed left Digital in favor of full time ostrich ranching.