TIME - Man of the Year/CompactPublishing-TimeMagazine-TimeManOfTheYear-Win31MSDOS.iso/moy/071392/0713200.000

Text File | 1993-04-08 | 4.9 KB | 102 lines

                                                                                BUSINESS, Page 71

Is This Bird a TURKEY?


A market in, yes, ostriches has taken off. But investors may
be in for a hard landing.

By Michael Riley/Atlanta -- Reported by Allan Holmes/Albany and
Richard Woodbury/Dallas


    Pssst! Want to get rich quick? Stop buying gold bullion.
Forget the stock market. Bag the racehorses. Just get your head
out of the sand and buy some ostriches.

    That's right, ostriches. Lured by the promise of doubling
or even tripling their investment, Americans from Maine to
California are flocking to buy the big birds, convinced that
they're on to the hottest thing since the chinchilla craze of
the 1950s. Suzanne Shingler, part owner of Fowler Farms near
Albany, Ga., has discovered the magic of ostrich farming, and
the gaze she directs at the large ivory-colored egg in her hands
has all the gleam of a gold-rush prospector's. "In a few
months," chirps Shingler, "this precious baby will be worth
$6,000." It will take $20,000 this year alone for her to care
for 20 ostriches and their offspring, but the farm stands to
rake in between $300,000 and $500,000 selling the chicks to
other investors.

    Such success stories have created a white-hot market for
ostriches, with some investors plopping down $100,000 or more
to start farms. Today nearly 20,000 ostriches grace about 2,000
U.S. farms, up from a handful of farms a decade ago. Imports of
live chicks have soared 500% in the past five years. Little
wonder. A fertilized ostrich egg fetches $1,500, and a pair of
breeding adults goes for around $40,000. With female ostriches
laying upwards of 80 eggs a year, it takes just basic math to
calculate astronomical returns.

    Construction magnate Daisuke Mizutani in 1989 bought half
the Bordelon Breeders farm in Texas, one of the largest in the
U.S., and Louisiana's Pacesetter Ostrich Farm will be the first
to go public this month. Even cautious bureaucrats are falling
in love with this ungainly bird. The Texas department of
agriculture, which recently hired a full-time ostrich expert,
has already made more than $1.2 million in low-interest loans
to farmers in the booming industry, and projects that ostrich
farming will pump nearly 5,000 jobs and $170 million into the
state's economy by the year 2000. Georgia's legislature plans
to consider a $150,000 grant to the University of Georgia to
find ways to increase the hatching rate (now 30%) and reduce
chick mortality. "It's beyond the fad stage," claims Kenny Page,
avian-medicine professor at the university. "It is where the
chicken industry was 30 years ago."

    Unlike its avian peers, the ostrich spawns a variety of
luxury products. Start with the meat, which aficionados liken
in taste to beef tenderloin. At about $20 per lb., there's a
wealth of cuts to be had from the average 400-lb. bird. Ostrich
meat is healthful as well: half the calories of beef,
one-seventh the fat and considerably less cholesterol, and it
even bests chicken and turkey in those categories. Huntington's,
a posh eatery in Dallas' Galleria, serves, among other ostrich
specialties, a blackened fillet, an ostrich tortilla pizza and
a hibiscus-smoked ostrich salad. "Our customers thought we were
kidding at first. Ostrich?" says restaurant manager Monika
Cundiff. "But then they became fascinated by it." One out of
four diners orders the lean meat. Even if ostriches don't become
haute cuisine, investors are hoping the big birds achieve
greater fame than a spot on Sesame Street. Ostrich eyelashes are
used as paintbrush bristles, feathers for dusting and hats and
coats, and the thick, tough hide is prized for everything from
cowboy boots to sofas.

    Despite all these potential products, ostrich farming, for
the time being, still smells a little bit more like an
investment scam than the producer of a legitimate cash crop. "In
my opinion, it's a pyramid scheme," warns scientist Gary Davis
of North Carolina State University in Raleigh. Ostriches remain
largely the obsession of a rarefied breeders' market, where
demand far outstrips supply and pushes prices through the barn
roof. All the chicks hatched in the U.S. this year have been
sold to investors hoping to cash in on the craze, but the good
times are unlikely to last. As the number of ostriches soars,
the high-flying prices will drop, unless a huge market for food
and other products opens up. But that has yet to happen.
Furthermore, observes Texas rancher Randy Reaves, who since 1988
has traded in most of his cattle for the more lucrative big
birds, "people don't understand that they can't throw some of
these birds in their backyard and expect to make $1 million and
drive a Rolls-Royce. It's not that simple." If future investors
choose to stick their heads in the sand, the ostrich may become
an apt metaphor.