WASHINGTON, D.C., U.S. — High production costs is hampering Nigeria’s feed sector development, according to a May 20 Global Agricultural Information Network report from the U.S. Department of Agriculture (USDA).

Seventy percent of the operational costs of most poultry, aquaculture and other livestock operations go to feed.

“The animal feed sector is estimated at more than $2 billion, continuing to attract significant local and foreign investment in large-scale feed operations,” the report said.

In 2016, Olam built a feed mill in Nigeria that produces 720,000 tonnes per year. The operation produces heat-treated mash and pellets. The USDA noted that despite higher operational efficiency with new feed mills reducing production cost the sector has slowed in the past two to three years.

“Other impacts include reduced consumer income following Nigeria’s economic recession and subsequent major currency devaluation in 2016,” the report said. “Poultry meat and egg consumption has declined substantially, but will rebound overtime.”

As one of Africa’s largest soybean producers, Nigeria is estimated to produce 1 million tonnes for the 2018-19 marketing year. The country utilizes soybean, corn, wheat and cassava. Sixty percent of production goes toward animal feed, particularly the poultry sector, the report noted.

Nigerian Soybean cake is a byproduct from the soy oil production. Nigerian farmers use soybean cake as a high-protein animal feed.

“Soybeans are an important high quality, affordable source of protein,” the USDA report said. “Soybean meal counts with a protein digestibility in poultry of approximately 85%.”