Hard reality as market forces shift against quail bonanza

The last few months have seen quail meat and quail eggs receive much hype as the “in-thing” and “a hot investment trend” in Kenya.

Online articles abound about how quail farming has superseded chicken, with reports of droves of young Kenyans abandoning their jobs to get into the ‘million-dollar’ business.

The excitement about the venture built slowly but surely in 2013, hitting a high at the end of the year with increased media interest.

It is now when prices are at an all-time low, the price of an egg having fallen from Sh100 to as low as Sh10, that the harsh business realities are setting in.

What was clear from the outset is that this new venture came with an abundance of hype and unfounded claims.

Some of the reporting on it and websites with info on the birds and their eggs, claimed that four-star and high-end hotels were ordering them by the truck load, and supermarkets could not get enough.

A phone call to some local “high-end” hotels disproves this notion as most said they have no quail eggs or meat on their menus, and one serves them only on rare occasions.

INCREASED COMPETITION

Nakumatt Supermarkets sell quail eggs but when these writers enquired, they were told there retailer did not need more eggs due to oversupply.

Marion, a dealer with Mavuno Foods who has been in the business of supplying quail eggs for the past six months, points to increased competition as the reason prices went down.

“There is a market, but it’s a bit tricky, very competitive. In terms of business, we are trying, but there is a lot of competition.”

It appears that the market for this product has, for the most part, been farmers selling to other farmers, and now that all “farmers” are in, the bubble has burst,” says Ecochicks Poultry’s Lena.

“We sell to people who want to keep the birds; we don’t sell to those who consume. We usually sell fertilised eggs and buy from farmers who have them.”

Like Marion, Lena avers that since the group started keeping the birds in April last year, the prices have been going down as many people bought into the quail-rearing craze.

But she disputes the notion that quail farming is a pyramid scheme. “That is not true. How can it be a pyramid scheme and yet it is a product that you can see and touch? ”

PLUMMETED PRICES

Mr Denis Kimathi, one of the farmers who ventured into raising quail last year, is not as optimistic. When he began, he would sell as many as 200 eggs a day for Sh100 each, making Sh20,000 a day.

This year, however, he has seen prices plummet. When he got into the venture as a hobby, Mr Kimathi says that one of the earlier ideas he and many others had was to look for markets in Qatar and China, but this, he concedes, may no longer be viable.

“I have spoken to a cousin in Qatar and a friend in China and they have told me they buy the eggs there at Sh9 or Sh10.” “I want to reduce the number of birds I have. By February, I want to be rid of them; feeding them is too expensive,” he said.

While most of Mr Kimathi’s customers were other farmers, he also had a few individuals interested in the eggs for their nutritional value.

He says that the feedback he got from them was positive, which points to the fact that even as the enterprises of farmers topple, there might be something to the quail eggs.

REARING COSTS

The cost of keeping the birds is also rising. In Nakuru, for example, a 70kg bag of chicken mash which was selling at Sh4,000 last year now goes for between Sh4,500 and Sh5,000, while a 50kg bag is retailing at between Sh3,000 and Sh3,500.

As more farmers embraced the new venture, cooperative societies have been established as the number those interested in rearing quail keeps rising.

New societies have sprouted in Kiamunyi, Lanet, Bahati, Gilgil Njoro and Nakuru towns as groups of farmers come together to market their products. A licence required by Kenya Wildlife Services to raise quail costs Sh1,500 a year.

Economists are also warning that the craze to rear quails could be a bad business venture as supply will soon outstrip demand.

Quail farming in Nairobi and Central Kenya is saturated, according to analysts.

On Facebook, most users are selling eggs, but only a few offer to buy.

CREATION OF DEMAND

Mr Mamuka Ndege, a quail farmer in Limuru, said he is now selling his eggs at Sh50, down from Sh120 in September last year. “The only alternative now will be to export them,” he says.

Financial expert X N Iraki argues that the myths are all aimed at creating demand. “No one is asking for medical evidence that the eggs the conditions they are said to cure,” he says. “It’s a fad whose time will pass before another idea crops up.”

Mr Iraki says wise entrepreneurs should be on the lookout for the next big thing instead of rushing to rear quails.

“The idea could be to sell lions because of insecurity. More curiously is how creative people have been in taming a bird whose sudden flight can be scary,” he said.

TREAD WITH CAUTION

Mr Kwame Owino, CEO of the Institute of Economic Affairs, warns Kenyans to treat the claims with caution.

“These are unverified claims and people will say anything to market their commodities,” he said. He concurs that some Kenyans will lose money as they are investing huge sums with the expectation of high returns.

“Soon there will be a glut and the prices will plummet,” he said. “And don’t be cheated; no goods can maintain high prices forever unless it’s a monopoly.”

Professor Abel Kinoti, Dean of the School of Business at Riara University in Nairobi, weighs in on what has happened as the market gets flooded.

“You cannot look at it as a pyramid scheme, because there’s something that people are consuming here. Pyramid schemes occur when one engages in a multi-level business but receives nothing of value.”

He is, however, not overly pessimistic about it. “The cobweb theory of agriculture states that when production is low, price is high.

Based on high prices, many farmers venture into production of the item, which then leads to oversupply, causing price to fall.

PRICE FLUCTUATION

This causes some people to give up and, with time, the price goes up again. You have to consider the economic cycle of boom, recession, depression, and recovery.”

Mr Kimathi thinks people should always first establish if there is a market present before committing to something. “At first there were only a few farmers. Most people learnt about it afterwards and then suddenly everyone was interested.”

Professor Kinoti says that what is needed is for people getting into business to take calculated risks. “Just because everyone else is doing something does not mean you have to do it as well. Business calls for serious analysis to minimise risk,” he said.

For those who find themselves with too many eggs and birds and not enough buyers, he advises they look for alternative uses and markets for them.