Production Soars While the Feed Sellers Go Under

Jul 12 , 2026. By BEZAWIT HULUAGER ( FORTUNE STAFF WRITER )

Official data points to an unprecedented agricultural boom under the "Bounty of the Basket" initiative, citing a jump in annual egg production from 3.2 billion to 11.7 billion. Yet on the ground, a starkly different reality is taking shape, in which small-scale traders and producers are being systematically priced out of business by escalating feed costs, reports BEZAWIT HULUAGER, FORTUNE STAFF WRITER.

At his stall around Ferensay Legasion, Mastewal Tekuye has decided to leave a business he has worked for years. He sells animal feed, or did, until demand collapsed and his costs climbed beyond what buyers would pay.

He can no longer shift even small daily volumes. He raised his price again last week to try to cover what he paid for supplies.

"I don't know what to do next," Mastewal said.

He put the price of a 50kg bag up by 500 Br. Once he sells the one quintal still on his hands, he thought of walking away.

Mastewal's retreat is a small window onto a larger contradiction unfolding in the poultry market. On the national level, official sources claim the poultry and livestock sector is booming. On the ground, the traders and small producers meant to carry that boom are being squeezed out of business, and consumers are paying more for less.

The reason both things are true at once is feed. The boom could be real, and the official figures are striking.

In its fourth year, the “Bounty of the Basket” programme has nearly doubled annual milk production, from a baseline of 7.1 billion litres, while remaining short of the 16.5 billion-litre target. Despite research figures showing production between four billion and five billion litres, officials attribute the increase to aggressive crossbreeding and improved infrastructure, lifting a typical cow's daily yield from 1.5 litres to 15 litres.

Poultry has moved faster still. Officials claim egg production jumped from 3.2 billion to 11.7 billion a year, and chicken-meat output more than doubled to 253,000tn, helped by model poultry villages and a rise in chick distribution from 26 million to 180 million a year.

Fisheries expanded from 78,000tn to about 200,000tn as the state raised the fingerling distribution ceiling from 300,000 to 16.5 million and expanded fishing into community ponds and the Renaissance (Nigat) Lake.

Honey beat its target at 428,000tn, a total that sits above a traditional hive yielding barely 10kg a year.

Behind these numbers, of which several in the sector question their credibility, sits a value chain that can run through as many as seven layers of intermediaries, and a feed bill that now swallows more than three-fourths of what it costs to keep an animal. That is the weight crushing Mastewal and his customers.

He is not alone in folding. Feed dealers and producers talk of a market under extreme pressure, as corn and essential supplements such as vitamins turn prohibitively expensive and buyers cut back. According to Mastewal, there are days he cannot sell 25kg.

An experienced poultry producer, speaking on condition of anonymity, estimated that feed now accounts for "80pc to 90pc of the cost" of production, and warned that additives such as methionine have reached high prices. One producer put the price of vitamin at 100,000 Br a quintal.

Shortages have compounded the squeeze, with the price of a single chick going up to between 179 Br and 280 Br. Even buyers who can pay face waiting lists of up to a year, with some producers reporting eight months or more to restock. Working capital drains away in the wait.

For a small operator, a year without new birds is a time without income, and the capital tied up in an empty shed earns nothing.

“Sometimes you won't even notice the rent when you see the price of feed,” one producer said.

Berhane Kebede, who has run a small poultry business near the Shiro Meda area in the northern outskirts of the capital for five months, found that feed prices have been climbing, recently rising by 2.50 Br a kilo to 79 Br. Yet she cannot pass the cost on.

“The distribution of eggs across the city by government networks has flooded the market,” she told Fortune.

It pushed prices down, leaving wholesale eggs at about 17 Br and retail between 22 Br and 25 Br, depending on local supply. Costs up, prices down, and no room left in between.

“It sometimes doesn't even cover the cost of the feed,” said Berhane.

Federal officials responsible for the sector do not dispute the squeeze, though they read the numbers differently.

The State Minister for Livestock and Fishery Development, Fikru Regassa (PhD), told a briefing at the Ministry last week that output of animal-source foods has expanded markedly under the four-year programme, and that local feed-processing capacity has expanded but should be allowed to catch up with surging demand.

He put feed at "50pc to 60pc" of production costs, well below what producers cite.

Fikru blamed much of the price rise on the behaviour of input markets rather than a simple shortage.

“Oilseed prices for crops such as soybean and corn, and other blended components, have increased and are ‘reflected directly’ in the compound feed delivered to farms,” he said.

Imported additives, amino acids, vitamins and minerals used to balance rations expose the sector to exchange-rate pressure and global price swings that feed into domestic prices.

The Ministry’s officials attributed the supply struggle to keeping pace with the rapid build-out of modern feed mills.

About 228 feed-processing plants, owned by cooperatives and private companies, are now registered and operating, spreading from Jigjiga and Asosa to regional towns that once depended on Addis Abeba. Among these is a mill in Jigjiga, the seat of the Somali Regional State, with an annual capacity of about 120,000tn, built to cut distances and costs on transport in the periphery.

“Even so, feed output under the programme reached about 259 million tonnes against a 250-million-tonne target, leaving no buffer once poultry and dairy numbers grew faster than planners expected,” the State Minister said. "The gap lies not between plan and performance but between feed output and the pace at which poultry and dairy numbers have expanded."

According to Fikru, eggs leaving farms in areas such as Shoa or Bahir Dar at 17 Br apiece can reach Addis Abeba at 25 Br after passing through several intermediaries, each taking a margin, with transport, storage and markups compounding the feed-driven rise. The structure leaves small producers with narrow margins while consumers meet prices that climb faster than incomes.

“To shorten the chain, the Ministry is opening more formal outlets in the capital where farmers and cooperatives can sell directly,” said the State Minister.

Federal and city officials encourage ‘Sunday markets’ and specialised shops for eggs, milk and poultry. However, demand adds its own volatility. Long fasting seasons in the Orthodox Christian calendar keep supplies steady while consumption drops. Prices fall sharply, undercutting small producers, driving newcomers out and pushing others toward exports when domestic demand softens.

The State Minister characterised the whole package as a generational reform, an attempt to move Ethiopia from "low-input, low-output" livestock toward intensive and market-oriented production that needs sustained investment in genetics, feed, animal health and skills.

“The programme includes training hundreds of artificial-insemination technicians and equipping them with motorbikes to reach farmers,” he said. “Genetic and feed reforms are long-term work, but the scale of investment in mills, breeding and disease control will in time yield steadier supply and more affordable animal foods.”

The pressure is not the poultry sector's alone. Poultry farming is largely a household affair, the Food & Agriculture Organisation (FAO) estimating that about 9.6 million households keep birds, while the marketing system remains informal and small.

Demand for animal-source foods is projected to rise two- to eightfold by 2050, and one dairy briefing warns that Ethiopia could face a daily milk shortfall of about 3.1 billion litres by 2028, a 29pc gap, if supply does not keep up. The market that has to absorb that demand is, by the Ministry's own account, one of the least developed links in the chain.

Those at the commercial end, such as Abdulsemed Mohammed, chief executive of Furaat Livestock Exporter, feel the same input squeeze. The company ships 200 to 500 live cattle and 10tns of meat a month to the Middle East.

“Feed supply has stayed critically low and grown dearer, held back by a shortage of producers,” he told Fortune.

With few mills, most feed still comes from rural areas as simple grass, which blocks any move to standardised nutrition, and the supply of veterinary medicine is a further worry.

For Elias Demeke (DMV), a managing practitioner at BCD Consultancy Services and a veterinarian with more than 12 years of experience, the bottlenecks are beyond a matter of supply and demand. They are the product of a bloated and inefficient value chain that rewards intermediaries while squeezing producers and consumers alike.

“The core problem is weak market integration that leaves producers and consumers disconnected,” he said.

His own research a few years ago found the livestock chain split into seven or eight layers, each taking a markup that benefits the middleman rather than the farmer.

"The middleman is the one who benefits," he said.

His example is corn, a critical feed component that may leave a farm gate at 2,000 to 3,000 Br a quintal. By the time it has passed through rural markets, collectors, urban markets, processors, and regional distributors, the price reaches about 8,800 Br, a rise of nearly 300pc driven by transport, VAT, and layer upon layer of margins, putting standardised feed beyond the reach of many breeders.

"It should have been subsidised, not taxed more, if the government thinks about the future generation," he said.

Elias also asked why more breeders do not grow their own forage and grain to bypass the market, and warned that natural feed sources are vanishing.

The Sululta Grassland, long an important green-feed supply for the capital's dairy farmers, is "shrinking and dying" as housing swallows communal grazing land.

“Without such grasslands,” he cautioned, “commercial dairying on the city's edge may soon become untenable.”

Culture compounds the economics, too. Close to 200 fasting days a year sharply cut demand for milk and meat, leaving producers with a surplus they cannot process or store. There is little support to preserve it, while imported powdered milk competes with fresh local products.

Elias questioned why the federal government does not “restrain imports” and back domestic production, and pressed for a "subsidy regime" in place of the current tax burden, calling milk a "must for children." He drew a pointed contrast between the capacity of Ethiopia's breweries and that of its milk processors, plants such as Shola, Lame and Sebeta Agro-Industry, to show how modest dairy processing remains.

Experts like Elias warn that poor preservatives have let dangerous adulterants into the chain, with some farmers and collectors using formalin, an illegal and hazardous preservative, to keep milk from spoiling on the way to the city.

“Solving any of this takes more than raising output,” Elias told Fortune. “It takes a substantial shortening of the chain, protection for grazing land, and a policy that treats livestock as a pillar of public health.”

Mastewal was not waiting for that reckoning. He was counting down the last quintal on his shelf and preparing to leave a business that the boom was supposed to reward him for.

PUBLISHED ON Jul 12,2026 [ VOL 27 , NO 1367]