Cattle feed Market in Maharashtra

• Kaira District Cooperative Milk Producers Union Limited (AMUL)

SHASHANK KANT

ANALYSIS

Objectives-

Feeding pattern of the farmers.

Competitors analysis.

Demand estimation.

Logistics.

Secondary Data: For general Overview of Farmers and their Feeding pattern.

Primary Data: For Farmers, society and dealers questionnaire and interview was referred.

FEED

The feed can be classified into three broad categories- dry and green grass, different types of cakes and agriculture byproducts like cotton, groundnut, bran, mustard etc and the third is compounded cattle feed.

LOCATION

• Four locations were designated

• Pune district for Farmers and distributors.

• Nasik, Solapur and Ahmednagar for distributors only.

Agro Climatic ZoneSouth Kokan Coastal Zone/Very highRainfall zone With laterite soils

North Kokan Coastal Zone/Very highrainfall zone with non-lateritic soils

Western Ghat Zone/Ghat Zone

Transition Zone – 1/Sub MontaneZone

Transition Zone – 2/WesternMaharashtra Plain Zone

Scarcity Zone/WesternMaharashtra Scarcity Zone

Assured Rainfall Zone/CentralMaharashtra Plateau Zone

Moderate Rainfall Zone/CentralVidarbha

Eastern Vidarbha Zone

Agro climatic conditions

• Pune and Nasik lies in Western Maharashtra plain zone, sub montane zone and Scarcity zone(Majority).

• Annual Rainfall:700-1250 mm. • Crops grown in Western Maharashtra plain zone are Jowar,

Bajra, Groundnut, wheat.• Ahmednagar and Solapur lies in Scarcity zone.• Annual Rainfall: 500-700 mm.

• Crops grown in this region are Bajra, Jowar, Groundnut, Safflower, Pulses.

• Maharashtra stands second in cotton production.• Traditional feed mainly comprises of cotton seed cake,

groundnut cake, wheat bran

CATTLE

(‘000) In milk Bovine

In milk Indigenous

In milk Crossbred

Buffalo

Ahmednagar 592 108 392 92

Nasik 271 121 65 85

Pune 432 64 223 145

Solapur 383 91 135 157

MILK PRODUCTION

• During last two decades, total bovine milk production in Maharashtra has doubled from 39 lakh tonnes (LMT) to 88 lakh tonnes in 2013-14.

• Region wise, western Maharashtra - particularly Pune division - accounted for about 40 per cent of the total milk production of the state followed by Nasik division which accounted for about 25 per cent.

• Similarly, the milk production density was highest in Pune division followed by Nasik division.

• Total Milk collection Pune Amul Satellite Dairy is 1.6 Lakh litres.

District-wise milk production(‘000MT)

DISTRICT MILK

Ahmednagar 2898

Nasik 734.4

Pune 2180

Solapur 1005.6

Feeding

Pellet feed versus Traditional feed

Below given figure shows the comparison between pellet feed and traditional feed.

Agreement to veterinary

This pie chart shows the

respondents view on how the

communication through veterinary is effective.

93% were in favour.

Product Mix

Amul has three range products complying to BIS type I, II, III standards

Characteristics (Maximum %)

Type I Type II Type III

Moisture 11 11 11

Crude Protein 22 20 18

Crude Fat 4 2 2

Crude Fibre 7 12 15

Productivity

There were 6 DCS where the procurement per farmer was 5-10 litres a day and 6 DCS were procuring more than 11 litres of milk daily per farmer.

Milk(in litres) Frequency Percent

Less than 5 2 14.3

5-10 6 42.9

11-15 3 21.4

More than 15 3 21.4

Brand

80% respondents in DCS were buying Amul brand whereas 8% were buying Godrej and Indranil.

Buyer seller relation

DCS NAME No. Of Farmers buying from Distributors

Uchalewasti Jaihanuman Doodh Utpadak 2

Takali Haji Dudh Utpadak Mandali 2

Khed - Siddheshwar Dudh Utpadak Mandali 2

Chas kaman Shivtej Dudh Utpadak Mandali 2

Annapur,Gahininath Dudh Utpadak Mandali 4

Koregoan Budruk Dudh Utpadak Mandali 3

Neherewadi Dudh Utpadak Mandali 2

Talegaon Dhamdher,Gurudatta Dudh Mandali 2

Competitor brands

Brands Avg price per bag Qty per bag Margin per bag (in %)

Qty sold per month

Power milk rich 1050 50 2.4 200 bags

Power Gain pellet 800 50 2.5 200 bags

Godrej milkmore 1150 50 3 220 bags

Doodhlaxmi 900 50 7 60 bags

Engine brand 900 49 10 120 bags

Appaji cattle feed 1050 50 8 160 bags

Sampoorna 1350 50 10 100 bags

Indranil (Hindustan) 1130 60 6 150 bags

Demand Estimation

• Amul satellite dairy daily procurement: 1,57, 326 litres • Yearly procurement : 56637360 litres = 58,619.67 MT • Growth rate obtained by weighted average method : 2.51%• Estimated Milk Procurement: 73333.2 MT

• Estimated Cattle feed market potential: 36666.6 MT

• Current yearly sales of Amul Cattle feed in Pune: 8018.34 MT• Market share of Amul in Pune: 21.8%

There is a Gap of 28648 MT of cattle feed which comprise of cattle feeds of other brands and traditional feed.

LOGISTICS

• Milk procured daily at Amul Satellite Dairy: 1,57,326 Litres.• 28% of milk procured is diverted to Virar plant for further processing and rest is

processed in satellite dairy, Pune.• Order is received at Amul Satellite Dairy and it is intimated via mail to Head

Office in Anand.• Demanded quantity is dispatched from Kanjari and Kapadvanj in Gujarat for the

satellite dairy in Pune.

• Cattle feed is packed in a bag of 50 Kilograms, it is transported in two types of trucks with capacity of 16 MT and 21 MT.

• Transportation cost: For Gujarat = Rs210/MT.

For Maharashtra = Rs1800/MT.

S.W.O.T

STRENGTH: Large customer base.

Faith in Amul Brand.

Price less than the traditional feed.

WEAKNESS: New in the market of Maharashtra.

Field Staff are not adequate to approach distributors.

Transportation cost is high, increasing the overall cost.

OPPORTUNITY: Making farmers aware of ration balancing.

Farmers feeding traditional feed can be targeted.

Maharashtra ranks fourth in cattle population.

Farmers can earn better by getting good quality milk using balanced feed.

THREATS: Traditional feed.

Lack of awareness of ration balancing, so farmers are adamant on not using

pellet feed.

Local brands are cheaper as they don not incur transportation cost.

Recommendations

• Making availability of compounded cattle feed, with initially some awareness programs, at villages and milk collection centres will change their misconceptions and imbibe its usefulness.

• Product containing 20% protein should be positioned against cottonseed cake.

• Farmers must be educated about the ration balancing.

• Awareness activities in the form of direct interactions with vets, awareness camps, free sample distribution, demonstrations in villages, and promotions in large agricultural fairs are required.

• Distributors must be approached through field staffs, as the farmers are not aware of Amul brand cattle feed. In case they know they do not buy as the price is high due to transportation cost compared to local brands.

• Margins offered should lie in the range of Rs. 20-30 with quantity based incentive to encourage efforts of retailers.