BEEF FEEDLOT - AN ATTRACTIVE INVESTMENT IN MALAYSIA. A. MUSTAFFA BABJEE B.H. HAWARI Department of Veterinary Services Kuala Lumpur, Malaysia.

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1 133 BEEF FEEDLOT - AN ATTRACTIVE INVESTMENT IN MALAYSIA A. MUSTAFFA BABJEE B.H. HAWARI Department of Veterinary Services Kuala Lumpur, Malaysia. INTRODUCTION With the exception of Thailand, ASEAN countries are net importers of beef. The need for importation is present despite the relatively very low per capita consumption of beef in these countries. It is expected that the importation will increase as demand for beef increases with the rising living standards projected over the next decade. Malaysia imports about 50% of the country's demand for beef. Development of the industry is faced with land and feedstuff contraints. Livestock activity face competition for land with other agricultural crop which tend to deliver higher economic return under current agricultural situation. As for feedstuffs, various crops and by-products have been identified as having the potential nutrient components. However, until recently none can be obtain in abundance and at competitive price that its use could be said be technically feasible, economically viable or readily acceptable by farmers. The various trials and demonstrations by the Department of Veterinary Services in the use of palm kernel cake (PKC) as cattle feed has paved the way for economic beef production in Malaysia. The use of PKC as cattle feed makes it now possible to operate a viable beef feedlot industry. PALM KERNEL CAKE About 500,000 metric tonnes of PKC is currently being produced in Malaysia. With the projected increase in oil palm production it is expected that there will be an ever bigger PKC production. Palm Kernel Cake is known to be a valuable source of protein and energy (Devendra, 1978). However, PKC has not been widely used as cattle feed till now. The Department of Veterinary Services, Malaysia (DVS) started using PKC as cattle feed as early as The initial usage was more for protein substitution in a mix concentrate ration for dairy cattle. Its use mainly directed towards cost savings. The use of PKC in various proportions for different class of animals eventually lead to its utilisation as a sole ration for cattle fattening. Recent study (M. Yusoff Sudin, 1985) in growing heifers showed that there is enough energy in PKC for normal growth of young animals. Two types of PKC are available. PKC expeller pressed is the residue after oil has been extracted from palm kernel by hydraulic pressure. Solvent extracted PKC is obtained after the PKC had undergone an additional stage of oil extraction with the use of a solvent which is usually hexane. The residual oil of 10-12% in the expeller pressed

2 134 PKC is much higher than the oil content (2%) of solvent extracted PKC. However, it is possible to obtain "low-oil" expeller pressed PKC. The solvent extracted PKC and "low oil" PKC are suitable as a 100% ration in feedlot fattening. The chemical composition of PKC is shown in Table 1. Table 1 COMPOSITION OF PKC Constituent Solvent Expeller Extracted Pressed PKC PKC Dry Matter Crude Protein Crude Fibre Ether Extract 2 8 Total Ash 4 6 Calcium Phosphorus Nutshells 7 12 TDN (Source: DVS) FEEDLOT FATTENING The main interest in PKC as feed for feedlot fattening is its use as a sole ration for cattle. The changeover of from a grass based diet to a 100% PKC feeding in feedlot can be done very rapidly. Feeder cattle have been put into a complete PKC ration almost overnight without any observed ill-effects. However, in practice, as a precaution, the recommended changeover period is about 10 days. Grass is gradualy reduced until finally withrawn completely from the ration. Molasses is sometimes added to coax the animal to eat the PKC, though most often this is unnecessary. A multi-mineral mix supplement is added to the PKC at the rate of 2-3% of the total amount fed. This could also be given as a block lick. Long-term feeding on 100% PKC ration will require Vitamin A supplementation. Blindness have been observed in a few animals in long term feeding trial at Institute Haiwan Kluang.

3 135 The feeding of PKC as a sole ration in feedlot fattening has been tested successfully and practised at DVS farms, smallholder units and commercial feedlots. In the first trial of feeding Sahiwal Friesian Crossbred solely solvent extracted PKC in a commercially operated feedlot an average daily weight gain of 749 gm and a feed conversion of 7 kg feed consumed to 1 kg gain was observed (Mustaffa Babjee et al 1984). A better performance is seen on a more controlled conditions where Sahiwal Friesian crossbred calves have shown to be able to grow at the rate of 760 gram per day with a PKC feed conversion ratio of about 1 kg gain to every 6 kg of feed consumed. A summary of DVS feeding trial results is shown in Table 2 and 3. Table 2 GROWTH PERFORMANCE OF CATTLE FEED 100% PKC Daily Daily Breed Ration Feed Weight Intake Gain Kg/Animal Kg/Day Sahiwal 100 PKC Friesian solvent Crossbreds extracted Kedah - Kelantan Sahiwal - 100% PKC Friesian Expeller Crossbreds Pressed 'Low fat' "Australian Commercial Crosses" (Source: DVS)

4 136 Table 3 GRURTH PERFORMANCE OF CATTLE FED PKC - MIXED RATIONS Daily Daily Breed Ration Feed Weight Gain Intake Kg/Day Kg/Animal Sahiwal 50% PKC Friesian solvent Crossbreds extracted Drcughtmasters 60% PKC solvent extracted 40% Palm oil sludge Brahman Sahiwal 60% PKC Friesian expeller Crossbreds pressed 'low fat' 40% Palm oil sludge (Source: DVS) SOCIO ECONOMIC CONSIDERATION There are about 170 factories producing PKC in Peninsular Malaysia of these there are three major factories producing solvent-extracted PKC. Another three factories are known to produce 'low oil' expeller-pressed PKC.

5 137 The ready availability of PKC, its efficiency as cattle feed, its ease of handling and usage, and the prevailing competitive price, make PKC the most practical feed for a viable feedlot beef production. Though feeder animals may still have to be imported, the meat equivalent in number of animals to be imported may be reduced at least by half. Besides the value added to locally produced PKC, a viable feedlot industry is now possible. At the prevailing price of PKC, it operation finishing 20 heads every of between 30,000-40,000 ringgit cash flow for such an operation is is estimated that a small feedlot month can expect a net income per year. A composite annual shown in Table 4. Table 4 ANNUAL CASH FLOW FOR FEEDLOT FINISHING 20 HEADS PER MONTH PRODUCTION COST 240 heads feeder cattle weighing 150 $3.20/kg PKC 1,400 $0.21/kg Depreciation (20% p.a.) on shed and equipments Mineral mixtures Veterinary Service and Drugs Labour Utilities Loan Repayment ($200,000 loan at 15% p.a. interest for 15 years) TOTAL COST 115,200 70,560 1,920 3,600 4,800 5,000 12,000 33, ,680 REVENUE Sale of 233 heads (after 3% mortality) weighing 350 $3.40/kg Profit per annum 277,270 30,590

6 138 It is further estimated that if all the 500,000 metric tonne of PKC produced can be fed, about 357,000 heads of cattle may be fattenned. At a very conservative dressing percentage estimate of minimum 45%, more than 50,000 metric tonnes of beef may be produced. PROSPECTS Current usage of PKC mainly as a sole ration is largely because of its practicality. The efficiency of PKC as feed can be expected to increase with better practical formulation and farmer readiness to handle more complex mixed rations. Large scale beef production through feedlotting based on PKC feeding will continue to be viable if there is no big fluctuation fran the current price for PKC. In addition, any big fluctuation in imported feeder cattle price will also affect profitability. This is because there will continue to be a dependence on imports for source of feeder cattle, until an active cow-calf industry can be established. Australia in currently the main source of feeder cattle and as such the price can be vulnerable to fluctuating world cattle market price. The price of PKC is not expected to drastically fluctuate. This is in view of increasing palm oil production in Malaysia and other countries. The use of PKC as feed components in other developed countries also face competition with other products like soya bean etc. Increase in price of feeder cattle may be controlled by looking into other sources of imports. It is also expected a viable beef feedlot industry will stimulate local cow-calf operations producing high quality, fast-growing, adaptable feeder cattle. References Devendra, C. (1978) : Utilisation of Feedingstuffs from the oil palm - in Feedingstuffs for Livestock in South East Asia, Malaysia Society of Animal Production. Yusoff Sudin, M (1985) : Performance of Growing Heifers Fed Supplementary Feeds of Palm Kernel Cake with Molasses or Cassava - Paper Presented at 1985 Annual Conference Malaysian Society of Animal Production. Mustaffa Babjee, A : Palmbeef : A Value Added Product of Palm Hawari B. H Kernel Cake - Paper presented at 1984 Mai R L (1984) Annual Conference of Malaysian Society of Animal Production.