poultry industry forward5

8/2/2019 Poultry Industry Forward5

1/29

Course: Economics for Business in a Global

Environment

Course Code: INBA 6085

Lecturer: Mr. Henry Bailey

Project: Describe the Industry Structure and

Competitive Dynamics in the Poultry Industry of

Trinidad and Tobago.Group Members:

Karth Arthur 811006596

Sonnia Alfred 03757156

Keisha Deokiesingh 05744922

Aaron Mohammed 02733603Nerrisa Mohammed 02734251

Josanne Thomas 809006305


2/29

)

Contents

ABSTRACT ...................................................................................................................................................... 3

INTRODUCTION ............................................................................................................................................. 3

LITERATURE REVIEW ..................................................................................................................................... 8

ANALYSIS / DISCUSSION .............................................................................................................................. 12

CONCLUSION ............................................................................................................................................... 19

BIBLIOGRAPHY ............................................................................................................................................ 21

APPENDICES ................................................................................................................................................ 24

Appendix 1 .......................................................................................................................................... 24

Appendix 2 .......................................................................................................................................... 24

Appendix 3 .......................................................................................................................................... 25

Appendix 4 .......................................................................................................................................... 26

Appendix 5 .......................................................................................................................................... 27

Appendix 6 .......................................................................................................................................... 28

Figure 1 Number of broilers farms in Trinidad and Tobago.......................................................................... 5

Figure 2 Capacity of broilers farms in Trinidad and Tobago ......................................................................... 6

Figure 3 Difference in the number of broilers farms from 2010 to 2011 ..................................................... 6

Figure 4 Difference in the capacity of broilers farms from 2010 to 2011 .................................................... 7

Figure 5 Average weekly chicken prices ....................................................................................................... 7

Figure 6 Kinked demand curve (Economicshelp n.d.) ................................................................................. 20

Figure 7 Demand curve for a collusive Oligopoly (Cartel) (Economicshelp n.d.) ........................................ 21

Table 1 Market structure and concentration Ratio (AmosWEB 2000-2012) ................................................ 9

Table 2 quick reference to basic market structures (WebFinance 2012) ................................................... 12

Figure 6 Number of broilers sold during 2006 to 2010............................................................................... 15

Figure 7 Live weight of broilers sold during 2006 to 2010 ......................................................................... 16Table 3 Poultry Industry compared to Oligopoly. ....................................................................................... 17

Table 4 CR4 and HHI of Trinidad & Tobago Poultry Industry ...................................................................... 18

Table 5 Numbers of broilers farms in Trinidad and Tobago ....................................................................... 24

Table 6 Average weekly price of chicken .................................................................................................... 25

Table 7 Numbers of broilers sold during 2006 to 2010 .............................................................................. 26

Table 8 Live weights of broilers sold during 2006 to 2010 ......................................................................... 26


3/29

?

Table 9 components of the poultry industry .............................................................................................. 27

Table 10 Porters Five Forces Analysis of the Poultry Analysis of Trinidad & Tobago .................. .............. 29

ABSTRACT

The purpose of this study is to understand the operation and identify the market structure of the Poultry

Industry of Trinidad and Tobago. This report considers the competiveness, the threat of substitutes and

new entrants, supplier and buyer power within the industry. This study also considers the concentration

of the industry and the types of products available. The results of this analysis show the industry

confirms to the factors of an Oligopoly.

INTRODUCTION

Thefreedictionary.com defines poultry as domesticated birds kept by humans for the purpose of

producing eggs, meat, and/or feathers. Birds that are killed for their meats are also referred to as

poultry. Poultry meat is rich in proteins and is a good source of phosphorus and other minerals,

and of B-complex vitamins. It is a healthier alternative to beef and pork because of a lower fat

content and has a higher proportion of unsaturated fatty acids than saturated fatty acids. Poultry

meat comprises of:

Chickens (87%) Turkeys (6.7%) Ducks (4%) Geese, pigeons, quails, pheasants, ostriches and emus (2.7%)


4/29

?

The top five poultry producers are:

United States China Brasil Mexico India

Poultry accounts for 30% of meat produced worldwide, second only to pork 38%. The 2011

global forecast for poultry estimates a grow rate of 2% and output of 100 million tones. The

increasing popularity of poultry can be attributed to:

value/price compared with other foods; good nutritional profile/low in fat; convenience/ease of preparation; versatility; well suited for quick-service and casual dining menus.

Source: Agribusiness Handbook, poultry, meat and eggs FAO, 2010

The poultry industry in Trinidad and Tobago plays in important in the agriculture sector. The

industry highlights are:

60 % Agriculture GDP Sales TT$ 1.3 billion (2010) Export TT$ 10 million Value added products TT$ 250 million Employment approximately 50,000 persons Linked to


5/29

?

agricultural sector via feed suppliers, garden shops service sector via restaurants, supermarkets the manufacturing sector via plastics, packaging, labelling

Over 500 farmers 4 hatcheries 5 feed plants 4 primary processing plants 2 further processing plants Over 3000 entrepreneurs. 2 % increase in the number of poultry farms (2010 2011) but with a decrease in

capacity of 11 %. (table 5 Appendix 1, figures 1 to 4)

Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.Figure 1 Number of broilers farms in Trinidad and Tobago

0

100

200

300

400

500

600

Small - less

than 10 000

Medium - 10

000 - 49 999

Large - 50 000

and over

TOTAL

239274

43

556

233266

47

546

NUMBER OF FARMS IN TRINIDAD & TOBAGO

January 2011 Number

January 2010 Number


6/29

?

Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Figure 2 Capacity of broilers farms in Trinidad and Tobago


Figure 3 Difference in the number of broilers farms from 2010 to 2011

0

2000,000

4000,000

6000,000

8000,000

10000,00012000,000

Small - less

than 10 000

Medium - 10

000 - 49 999

Large - 50

000 and over

TOTAL

1375,949

5431,971

3241,446

10049,366

1318,436

5618,3974298,839

11235,672

CAPACITY OF BROILER FARMS IN TRINIDAD &

TOBAGO

January 2011 Capacity

January 2010 Capacity

6

8

(4)

10

(6)

(4)

(2)

0

2

4

6

8

10

12

Small - less than 10

000

Medium - 10 000 -

49 999

Large - 50 000 and

over

TOTAL

Difference in Number of farms from 2010 to

2011

Difference Number


7/29

?


Figure 4 Difference in the capacity of broilers farms from 2010 to 2011

The price of chicken at groceries and supermarkets has seen many fluctuations from May 2010

to December 2011 and shows a 15.62 % increase over the period. However, the price of live

chicken has decreased by 7.75 % over the same period (figure 5, table 6 Appendix 2).


Figure 5 Average weekly chicken prices

57,513

(186,426)

(1057,393)(1186,306)

(1400,000)

(1200,000)

(1000,000)

(800,000)

(600,000)

(400,000)

(200,000)

0

200,000

Small - less than

10 000

Medium - 10 000

- 49 999

Large - 50 000

and over

TOTAL

Difference in Capacity of farms from 2010 to

2011

Difference Capacity

TT$6.84TT$5.24

TT$13.18

TT$11.79

TT$13.40

TT$0.00

TT$2.00

TT$4.00

TT$6.00

TT$8.00

TT$10.00

TT$12.00

TT$14.00

TT$16.00

Jan-10

May-10

Aug-10

Nov-10

Feb-11

Jun-11

Sep-11

Dec-11

Apr-12

TT$

Month-Year

AVERAGE WEEKLY CHICKEN PRICES

PLUCK SHOP PRICES ($ / lb)

LIVE WEIGHT

GROCERIES AND

SUPERMARKETS PRICES ($ / lb)

Linear (PLUCK SHOP PRICES ($ /

lb) LIVE WEIGHT)

Linear (GROCERIES AND

SUPERMARKETS PRICES ($ / lb))


8/29

=

LITERATURE REVIEW

Industry Analysis

Businessdictionary.com defines a market analysis as a market assessment tool designed

to provide a business with an idea of the complexity of a particular industry. It analyses the

effects of an industrys profitability, economic and market factors, the performance of

competitors, and estimates the industrys future prospects.

Porters Five Forces

Porter's Five Forces is a simple but powerful tool used to analyse industry attractiveness. It

provides insights into current market position and provides opportunities to identify and

maximise situations of strength, correct weaknesses and minimises mistakes as well as identify

potentially profitable products and services.

Porters five forces suggest five factors that should be analysed to determine competitive power

in an industry. These are:

Supplier power Buyer power Competitive rivalry Threat of new entrants Threat of substitutes

Competitive Rivalry

Competition is integral to the success of many market structures and is determined by analysing:

Concentration ratio Quickmba.com defines concentration ratio as the percentage of market

share owned by the largest m firms in an industry, where m is a specified number of firms, often


9/29

?

four. It illustrates the market control of an industrys four largest or eight largest firms. Its

calculated by adding their market share, CR4 or CR8.

CONCENTRATION % POSSIBLE MARKET STRUCTURE

No concentration 0.00 % Perfect competition, Monopolistic competition

Total concentration 100.00 % Monoploy

Low concentration 0 50 % Perfect and Monopolistic competition, Oligopoly

Medium concentration 50 80 % Oligopoly

High concentration 80 100 % Oligopoly, MonopolyTable 1 Market structure and concentration Ratio (AmosWEB 2000-2012)

Product differentiation involves differentiating from competitors' products as well as a firm's

own product offerings (price, quality, service, benefits, etc.) for intended customers

Exit barriers cost related obstacles that prevent a company from exiting a market.

Growth rate - The amount of increase a particular variable has acquired within a specified

period of time. Rivalry is higher in markets characterised by slow growth and weaker in markets

with faster growth.

Threats to new entrants

Potential Threat of New Entrants is influenced by:

Entry barriers circumstances particular to a given industry that create disadvantages for new

competitors attempting to enter the market (government regulations, economic factors, marketing

conditions, capital requirements, brand loyalty). Low entry barriers represent high attractive and

high entry barriers low attractiveness


10/29

2

Pool of entry candidates The number of persons or firms that possesses the resources

necessary to enter the industry

Power of suppliers

This considers the strength of supplier-seller relationships within the industry. Supplier

bargaining power is determined by:

Product Availability product is readily available from many suppliers at the going market

price.

Switching costs - Degree of ease associated with switching from one supplier to another or to

switch to attractive substitute inputs. High switching costs signal strong supplier bargaining

power. Low switching costs signal weak bargaining power.

Degree of pricing power - Addresses suppliers of items considered to be in short supply.

Supplier bargaining power decreases with high availability and increases with low availability.

Backward integration - Focuses on whether it makes good economic sense for industry

members to self-manufacture items they have been buying from suppliers. Suppliers

specializing in the high volume production of a component at a lower cost, means industry

members could achieve via self-manufacturing.

Threat of substitutes

This affects the competitive environment of industry firms and influences their ability to achieve

profitability. The availability of substitutes threatens the profitability of an industry. Lack of

close substitutes makes an industry less competitive and increases profit potential for the firms.

Relative price performance of substitute - Greater relative value of the substitutes, limits the

industry profit potential


11/29

2

Buyer switching costs - High switching costs deter switching to substitutes, whilst low

switching costs make substitutes more attractive. Typical switching costs include the time and

convenience, costs of additional equipment, time and cost in testing, quality and reliability of the

substitute, psychological costs of severing old supplier relationships and establishing new ones.

Perceived level of product differentiation - Availability of a variety of differentiated products

increases the attractiveness of buyers and reduces the threat of substitutes.

The availability of substitutes - When greater substitute products are available, the demand is

more elastic

Market structure

The characteristics of a market, includes the number, relative strengths of buyers and sellers,

degree of collusion, competition levels of firms, extent of product differentiation, and ease of

entry into and exit out of the market

The market structure refers to the different characteristics such as size, number of providers,

market share, purchasing behaviour, and growth forecast.

Several market structures exist: Perfect Competition, Monopolistic Competition, Oligopoly and

Monopoly. Refer to the table below

Market

Structure

Seller

Entry

Barriers

Seller

Number

Buyer

Entry

Barriers

Buyers

Number

Product CR4 HHI

Perfect

CompetitionNo Many No Many

Homogeneous 0 50 % < 1000


12/29

2

Monopolistic

competitionNo Many No Many

Differentiated 0 50 % < 1000

Oligopoly Yes Few No Many

Homogeneous /

Differentiated

40 100

%

> 1000

Oligopsony No Many Yes Few Homogeneous

Monopoly Yes One No ManyUnique 80 100

%

10000

Monopsony No Many Yes One Differentiated

Table 2 quick reference to basic market structures (WebFinance 2012)

Herfindahl-Hirschman Index (HHI) Economics.about.com defines HHI as a way of

measuring the concentration of market share held by particular suppliers in a market. HHI is the

sum of the square of the market share of the firms competing in the industry. Its value can be as

low as 0 and as high as 10000. The HHI value for competitive markets is below 1000; between

1000 1800 represents a moderately concentrated market and above 1800 represents a

concentrated market.

ANALYSIS / DISCUSSION

The Poultry Association of Trinidad and Tobago valued the 2010 sales of broiler meat locally at

TT$1,300m with exports totalling TT$10m. The Food and Agriculture Organization (FAO)

reported in November 2005, that poultry represented 60% of agricultures contribution to gross

domestic product (GDP). This suggests that this is a highly profitable industry with newcomers

expecting to earn attractive profits.


13/29

2

Arawak and Company Ltd and Warner Grain Mills Limited indicated that potential entrants

require a high start-up capital of approximately TT$2b which reduces the threat of potential

entrants into the industry. Government regulation is a barrier to entry in the poultry industry as

Environmental Management Authority, clearance is required before the construction of broiler

pens and Public Health approval is required before actual operations begin.

Production processes and operations are not protected by regulations or patents, therefore no

licences or permits are required to do business. The poultry industry is an open market and

information on the production process is readily available, making it quite attractive for a new

entrant.

Inputs for the poultry industry are easily accessible. Two of larger firms have backward

integrated in feed production. Corn and soya bean used in the production of feed are obtained on

a commodity market at a fixed price set by the Chicago Board of Trade, while hatching eggs,

medication, vitamins etc. are obtained from several suppliers. This makes it easy for new

competitors to enter the industry.

Whilst the Muslim community prefers halaal chicken, it would seem that the majority of

customers in the industry do not portray a significant level of brand loyalty as products are not

unique, resulting in little or no costs of switch to another brand. Therefore a potential competitor

has to spend very little to overcome customer loyalties and build its own clientele, making it a

favourable industry to enter.

Whether the industrys entry barriers are considered high or low depends on the resources and

competencies possessed by the potential entrant. That is, if the company has sizable financial

resources and proven competitive capabilities they may be able to combat the industrys entry


14/29

2

barriers rather easily thus making their threat greater. However, if the company does not have

access to sizable financial resources, their threat is greatly reduced to existing firms.

The market has various firms and so the retailer is able to choose from many producers. All

producers provide basically identical products and so the bargaining power of Buyers would be

substantial given the presence of competitors.

Four firms have the majority of the market share and the price is set by the demand and supply in

the market.

Arawak sells 40% of their product in Supermarkets and 30% in the Food Services sector. They

consider their partnerships with their Prestige Buyers to be a competitive advantage. Similarly,

WGM sells 30% of their produce to restaurants and supermarkets.

Some large retailers have bargaining power based on being Prestige Buyers. WGM has buyers

such as PriceSmart, Tru Valu, Movietowne and Foodbasket. Arawak has buyers such as Hi Lo,

Mc. Donalds and Prestige Holdings. The substantial value of these buyers purchases contribute

to a large share of income for these producers which increases their power and has negotiated

product specifications, such as pre-ready chicken, special cuts, seasoned chicken, specified size

and weight, as well as best by date.

The companies in the local poultry industry spend less than 5% of their revenue on advertising

and are less focused on innovation. The local industry consists of four major firms of different

sizes. These firms are not aggressive in their pursuit of market share. The level of differentiation

in the poultry industry is fairly low. The top four firms can easily interchange most of their

products with very little consequences.


15/29

2

The industry has experienced slow steady growth from 2006 to 2010. The number of broilers

sold has increased by an average of 2.93 % per year (shown in figure 6 and table 7 Appendix

3) with a corresponding increase in price of 4.08 % per year (shown in table 8 Appendix 4 and

figure 7) over the same period. This low growth rate can serve to increase competition within the

industry.


Figure 6 Number of broilers sold during 2006 to 2010


3191832652

33140

35499

35664

y = 1033.9x - 2E+06

R = 0.9173

31000

32000

33000

34000

35000

3600037000

38000

39000

2005 2006 2007 2008 2009 2010 2011 2012 2013

Number/000Bir

ds

Year

NUMBER OF BROILERS SOLD DURING 2006

TO 2010

SALES

Linear (SALES)

56106

63261 63642

69174

65256

y = 2421.3x - 5E+06

R = 0.651250000

55000

60000

65000

70000

75000

2005 2006 2007 2008 2009 2010 2011 2012 2013

Weig

ht/000Kg

Year

LIVEWEIGHT OF BROILERS SOLD DURING 2006 -

2010

SALES

Linear (SALES)

38000

72000


16/29

2

Figure 7 Live weight of broilers sold during 2006 to 2010

In the Poultry Industry two of the top four firms are fully integrated and are not directly

influenced by suppliers. Inputs to the poultry production process demonstrate low levels of

product differentiation allowing firms to easily switch amongst suppliers. Also, inputs are not in

short supply which weakens suppliers pricing ability and bargaining leverage.

It can be concluded that bargaining power of suppliers is weak because inputs are readily

available, switching costs are low; industry members are a threat to integrate backwards into the

business of suppliers and self-manufacture their own inputs.

Locally produced poultry is the least expensive option in the animal protein market with the

prices of pork, goat, lamb, beef, imported meats and seafood ranging from 1.5 to 4.5 times the

price of chicken.

Substitute products are readily available at supermarkets or pluck shops; therefore, consumers

spend very little time and incur minimal inconvenience to switch to a substitute product.

Restaurants and groceries include a range of meat options and dishes on their menus and shelves

which provide consumers with a wide range of choice. The consumers tastes, habits,

demographics and income determine which product is consumed.

The diverse and multicultural background of Trinidad and Tobago, results in a seasonal demand

for poultry. During seasons and religious festivals, such as Lent, Divali and Christmas, poultry in

some instances is abstained from, with consumers preferences redirected to other meats or

seafood.

The overall threat of substitute products was assessed as low based on mainly the relative price-

performance of poultry when compared to other substitute products, and the increasing level of


17/29

2

product differentiation since price was considered to be the main determinant of industry

sustainability. The completed Porters Five Forces Analysis is shown in Apendix 5 and 6.

Market Structure

Market

Structure

Seller

Entry

Barriers

Seller

Number

Buyer

Entry

Barriers

Buyers

Number

Product CR4 HHI

OLIGOPOLY YES FEW NO MANY

Homogeneous /

Differentiated

40 100 % > 1000

POULTRY YES FEW NO MANYHomogeneous /

Differentiated

85.00 % 2766.00

Table 3 Poultry Industry compared to Oligopoly.

Seller Entry Barrier, seller numbers, buyer entry barriers and buyer numbers are features of the

Oligopolistic structure that will be analysed. In an oligopoly market structure barriers to entry

exist where EMA (Environmental Management Authority) must grant a Certificate of

Environmental Clearance (CEC) for establishment of all Poultry and Animal Husbandry

Production. Start-up capital can be considered yet another barrier where the requirement is

approximately TT$2 billion if one wants to compete with the four larger firms.

The poultry industry has several sellers including pluck shops and small scale farmers; however

Arawak, Warner Grains Mills (WGM), Nutrina and Mastermix account for approximately 85%

of the overall market share. There are no barriers for entry into this industry by buyers as they

are free to purchase from whom they deem more economical or by taste preference. The industry


18/29

2

has many buyers, some of which are; Pricesmart, True Value, Marios, Movietown, foodbasket,

KFC, Mc Donalds, Japs, Pollo Tropical just to name a few.

In analysing the four firm concentration (CR4) ratio (Table 4 ) it was clear that Trinidad and

Tobagos Poultry Industry has an oligopoly market structure as the four largest poultry firms

combined holds more than 50% of the market share, together they hold approximately 85%

market share.

Based on the analysis, Trinidad and Tobagos poultry industry can be classified as an Oligopoly

market structure, as the market is dominated by four (4) companies that holds majority of the

market share, being Arawak, WGM, Nutrina and Mastermix with Arawak holding majority share

out of the four.

TOP 4 FIRMS

Market

Share / %

Market Share

^2

Arawak & Company LTD 45.00 2025.00

WGM 25.00 625.00

Nutrina Farms 10.00 100.00

Mastermix Farms 4.00 16.00

Concentration Ratio, CR4 85.00

HHI 2766.00

Table 4 CR4 and HHI of Trinidad & Tobago Poultry Industry

NOTE: The market share of

Nutrina and Mastermix farms has

been estimated based on their

customer base.


19/29

0

Prices in an oligopoly are usually lower than in a monopoly, but higher than it would be in a

competitive market and also tends to remain stable because if one company lowers the price too

much, then the others will do the same. The result lowers the profit margin for all the companies,

but is great for the consumer. On the downside however output in this type of industry would be

less than in a competitive market and more than in a monopoly. Research and development (or

innovation), location, packaging, marketing can be considered competing forces among

companies in an oligopoly. Major barriers such as economies of scale, access to technology,

patents, and actions of the businesses keep companies from joining oligopolies. Barriers can also

be imposed by the government, such as limiting the number of licenses that are issued.

CONCLUSION

The poultry industry in Trinidad and Tobago plays an important role in the agriculture sector.

The number of birds produced has grown at a rate of 2.93 % from 2006 to 2010 with a

corresponding 4.08 % increase in the live weight of broilers resulting in over 65 million Kg of

chicken sold in 2010.

Firms trying to enter the industry have to overcome some entry barriers resulting in few sellers.

Correspondingly, it is very easy for buyers to enter the market leading to a large number of

buyers. The products in the industry are considered to be differentiated products. The

concentration ratio of the top four firms is approximately 85 % with a Herfindahl-Hirschman

Index of approximately 2500.

These factors support our conclusion that the market structure is an Oligopoly.

Firms in an Oligopoly can influence the price and quantity of a product in many ways. Two such

ways are collusion (Cartel) or follow a kinked demand curve.


20/29

0

Figure 6 Kinked demand curve (Economicshelp n.d.)

The Kinked Demand Curve (Figure 6) maximises profits at Q1, P1 where MR=MC. Thus a

change in MC, may not change the market price.

Assumptions:

Firms are profit maximisers. Demand is price elastic for price increases. Demand is inelastic for price decreases


21/29

Figure 7 Demand curve for a collusive Oligopoly (Cartel) (Economicshelp n.d.)

Collusion in an Oligopoly leads to the formation of a Cartel. Once formed, firms will try to fix

prices and determine quotas at the level that maximizes profits. The industry will set a quantity

of QM (shown in figure 7) and a corresponding price of PM. The Quantity QM distributed

between the firms in the industry.

BIBLIOGRAPHY

Abdolreza Abbassian, Paul Racionzer, Concepcin Calpe, Peter Thoenes, El Mamoun Amrouk, Nancy

Morgan, Michael Griffin, Audun Lem,. Food Outlook, Global Market Analysis. June 2011.

http://www.fao.org/docrep/014/al978e/al978e00.pdf (accessed 03 08, 2012).

About.com, Economics. The H Index (The Herfindahl-Hirschman Index) . 2012. (accessed 03 18, 2012).


22/29

AmosWEB. Concentration ratios. 2000-2012. http://www.amosweb.com/cgi-

bin/awb_nav.pl?s=wpd&c=dsp&k=concentration+ratios (accessed 03 17, 2012).

Arthur A. Thompson, Jr., A. J. Strickland 111, John N. Gramble. Crafting and Executing Strategy: The

Quest for Competitive Advantage: Concepts and Cases, 17/e. McGraw-Hill Higher Education,

2010.

Barriers to exit. 2012. http://www.investopedia.com/terms/b/barriers-to-exit.asp#axzz1oxKLyWfn

(accessed 03 12, 2012).

Co., M. Hamel-Smith &. Environmental approval. 2009.

http://www.trinidadlaw.com/home/general/content.aspx?CategoryID=19&SubCategoryID=63

(accessed 03 13, 2012).

Division, Agricultural Planning. Average weekly prices of chicken. Poultry Bulletin, August 2011: 6.

. Average weekly prices of chicken. Poultry Bulletin, July 2011: 6.

. Average weekly prices of chicken. Poultry Bulletin, September 2011: 6.

. Average weekly prices of chicken. Poultry Bulletin, October 2011: 6.

. Average weekly prices of chicken. Poultry Bulletin, November 2011: 6.

. Average weekly prices of chicken. Poultry Bulletin, December 2011: 6.

Economicshelp. Oligopoly diagram. n.d. www.economicshelp.org/microessays/markets/oligopoly-

diagram.html (accessed 03 19, 2012).

Fintonin. Market structure, Monolopy, Oligopoly, Monopolistic and Perfect Competition. 2011.

http://fintowin.com/2011/07/market-structure-monopoly-oligopoly-monopolistic-and-perfect-

competition/ (accessed 03 18, 2012).

inc, Farlex.poultry. 2012. http://encyclopedia2.thefreedictionary.com/poultry (accessed 03 12, 2012).

inc, Webfinance. barriers to entry. 2012. http://www.investorwords.com/425/barriers_to_entry.html

(accessed 03 17, 2012).

Inc, Webfinance. Market structure. 2012. http://www.businessdictionary.com/definition/market-

structure.html#ixzz1pKFFlK3o (accessed 03 16, 2012).

Industry analysis. 2012. http://www.businessdictionary.com/definition/industry-analysis.html (accessed

03 12, 2012).

Inna Punda, Dmitry Prikhodko.Agribusiness Handbook, Poultry, Meats and Eggs. 2010.

http://www.fao.org/docrep/012/al175e/al175e.pdf (accessed 03 08, 2012).


23/29

Investpedia. Herfindahl-Hirschman Index - HHI. 2012.

http://www.investopedia.com/terms/h/hhi.asp#axzz1pQseQY30 (accessed 03 18, 2112).

Koopman, Philip. How to write an abstract. October 1997.

http://www.ece.cmu.edu/~koopman/essays/abstract.html (accessed 03 18, 2012).

Lovetoknow, Corp. Oligopoly Examples. 1996-2012. http://examples.yourdictionary.com/oligopoly-

examples.html (accessed 03 16, 2012).

Ltd, Bloombury Information. Market structure. 2011. http://www.qfinance.com/dictionary/market-

structure (accessed 03 15, 2012).

Ltd, Bloomsbury Information. Market structure. 2009-2011.

http://www.qfinance.com/dictionary/market-structure (accessed 03 16, 2012).

ltd, planning & controls solutions. Industry analysis, what is industry analysis. 2012.

http://businesscoaching.typepad.com/the_business_coaching_blo/2008/04/industry-

analys.html (accessed 03 12, 2012).

Madison, The writing center @ the University of Wisconsin -.Abstracts examples. n.d.

http://writing.wisc.edu/Handbook/presentations_abstracts_examples.html (accessed 03 18,

2012).

Office, Central Statistical. Poultry Bulletin, Vol.13, No.354. Poultry Bulletin, January 2011: 1-13.

Philip K.Y Young, John J. McAuley. Industry Concentration. 2010.

http://www.quickmba.com/econ/micro/indcon.shtml (accessed 03 12, 2012).

Product differentiation. 2012. http://www.businessdictionary.com/definition/product-

differentiation.html (accessed 03 12, 2012).

Tobago, Poultry Association of Trinidad and. The Poultry Industry, A national Asset Worth Defending.

Port of Spain, 2011.

tutor2U. Kinked demand curve under Oligopoly. n.d.

http://tutor2u.net/economics/content/topics/monopoly/kinked_demand.htm (accessed 03 12,

2012).

Ulc, Investopedia. Oilgopoly. 2012.

http://www.investopedia.com/terms/o/oligopoly.asp#axzz1pND9KroW (accessed 03 13, 2012).

WebFinance, Inc. Market structure. 2012. http://www.businessdictionary.com/definition/market-

structure.html#ixzz1pKFFlK3o (accessed 03 16, 2012).


24/29

APPENDICES

Appendix 1

SIZE OF FARM (square

feet)

January 2011 January 2010

Difference Difference

Number Capacity Number Capacity Number Capacity

Small - less than 10 000 239 1375,949 233 1318,436 6 57,513

Medium - 10 000 - 49 999 274 5431,971 266 5618,397 8 (186,426)

Large - 50 000 and over 43 3241,446 47 4298,839 (4) (1057,393)

TOTAL 556 10049,366 546 11235,672 10 (1186,306)

Change in the number of farms 2% Change in capacity -11%Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Table 5 Numbers of broilers farms in Trinidad and Tobago

Appendix 2

MONTH

PLUCK SHOP

PRICES ($ / lb)

LIVE WEIGHT

GROCERIES AND

SUPERMARKETS

PRICES ($ / lb)

May-10 TT$5.68 TT$11.59

Jun-10 TT$6.84 TT$11.98

Jul-10 TT$5.49 TT$12.61

Aug-10 TT$5.82 TT$13.18


25/29

Sep-10 TT$5.86 TT$12.72

Oct-10 TT$5.92 TT$11.79

Nov-10 TT$5.91 TT$12.70

Dec-10 TT$6.00 TT$13.17

Jan-11

Feb-11

Mar-11

Apr-11

May-11 TT$5.42 TT$11.81

Jun-11 TT$5.49 TT$13.34

Jul-11 TT$5.56 TT$11.79

Aug-11 TT$5.46 TT$11.79

Sep-11 TT$5.56 TT$13.15

Oct-11 TT$5.56 TT$13.00

Nov-11 TT$5.12 TT$12.68

Dec-11 TT$5.24 TT$13.40

CHANGE -7.75% 15.62%


Table 6 Average weekly price of chicken

Appendix 3000 Birds

PERIOD SALES

WHOLESALE RETAIL

TOTAL

CONTRACTORS

/ PROCESSORS

NONCONTRACTOR TOTAL LIVE

KILLED

AND


26/29

DRESSED

2006 31918 31888 29267 2621 30 16 14

2007 32652 32566 29478 3090 86 45 41

2008 33140 33061 27643 5418 79 25 54

2009 35499 35462 28589 6873 37 7 30

2010 35664 35647 26758 8890 17 4 13

Growth Rate 2.93%


Table 7 Numbers of broilers sold during 2006 to 2010

Appendix 4

000 Kg

PERIOD SALES

WHOLESALE RETAIL

TOTAL

CONTRACTORS

/ PROCESSORS

NONCONTRACTOR TOTAL LIVE

KILLED

AND

DRESSED

2006 56106 56016 51629 4387 90 54 36

2007 63261 63134 56888 6246 127 55 72

2008 63642 63449 61797 11652 193 40 153

2009 69174 69104 54516 14588 70 8 62

2010 65256 65214 47668 17547 42 7 35

Growth Rate 4.08%Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Table 8 Live weights of broilers sold during 2006 to 2010


27/29

?

Appendix 5

Inputs Processing of Poultry Outputs

Feed (wheat or corn) Equipment/Machinery Live poultry

Baby Chicks (Hatcheries) Skill Packaged meats

Vitamins Expertise

Distribution to

retailers/consumers

Hormones Packaging Processed meats

Labour Live Storage/Pens

Vaccines Cold Storage

Quality Assurance

Inspection and Testing

Table 9 components of the poultry industry


28/29

Appendix 6

Exit costs are relatively low

Industry concentration is high

Fixed costs are relatively high

Industry growth is low

Insignificant product

differences

Switching costs are low

Low brand loyalty

High capital investment

Medium government regulations -

EMA and Health certificates

Relatively easy access to inputs.

Low level of brand loyalty

There is no significant protection via

patents.

Buyer switching cost is low

Many buyers of various sizes

Customers could grow their ow

poultry for their own use.

Product differentiation has mediu

significance

Many substitutes are available b

are more costly

Small number of suppliers

Differentiation of inputs is

insignificant

Inputs are readily available


Possibility of backward

integration is moderate


Substitutes are readily

available

Many substitutes are available

but are more costly

COMPETITIVERIVALRY

THREAT OF

NEW ENTRY

SUPPLIER POWER

MEDIUM

LOW

MODERATE

LOW

MODERATE

THREAT OF

SUBSTITUTION

BUYER POWER


29/29

?

Table 10 Porters Five Forces Analysis of the Poultry Analysis of Trinidad & Tobago

poultry industry forward5

Documents