… A closer look at industry performance, pros and cons
By Hilary Mare
THE local slaughter and beef processing industry is running a ‘real risk of being completely marginalised’ because of various factors be it in the local, regional or international markets.
Whilst the long-term objective of any industry, in particular the red meat industry is to increase its market share of consumers’ purchases, the lowest cattle numbers for the last decade are currently being seen, as well as the effects of the current global economic crisis which is affecting all producers across the country.
With very little doubt, currently the industry is fragmented and fragmenting even further.
According to the Meat Board, the total number of cattle that were marketed between the months, January to May 2016 stood at 144 859 of which 50 568 were slaughtered whilst the live exports made up 94 291. The live cattle exports make up 65 percent of the total cattle marketed whilst the cattle that have been slaughtered locally accounted for 35 percent during the reporting period.
Comparing year-on-year, a decrease of 10.18 percent can be observed in the total marketing of cattle from 161 277 units in 2015 to 144 859 in 2016 over the reporting period (January to May).
“Increased live exports can be attributed to emergency marketing of weaners by producers due to the drought conditions,” the Meat Board said recently.
In the sheep industry, the total marketing of sheep by the end of May 2016 was 396 295 head, indicating a 10.12 percent decrease in the total marketing, down from a level of 440 934 head last year, over the same reporting period. This is composed of 148 196 head of sheep exported to South Africa and 158 900 head of sheep slaughtered during the reporting period. Despite the rainfall received in some parts of the country, it was not sufficient to help farmers maintain the animals on the land, due to limited availability of forage.
“The decrease in marketing, between the two years, month-on-month can be attributed to the fact that the rain prospects for 2016 were much better than that of the previous year as the expectation for more rain was positive at the beginning of the year,” extended the authorities.
Out of the total live exports to South Africa, a total of 7 190 sheep were exported under the too lean too small scheme. Sheep exports that were exported under the normal quota made up 140 250 sheep units accounting for 94.6 percent of the live exports, whilst the stud exports and the fat tail sheep was equivalent to 56 and 700 sheep units, respectively.
With a three month capacity of 165 000 a total of 60 763 sheep were slaughtered at the Mariental abattoir, representing a 37 percent capacity utilization of the abattoir during January- May 2016. Keetmanshoop abattoir and the Aranos abattoir utilised 38 percent and 21 percent of their five-month slaughter capacity respectively. The low capacity utilisation percentages can be attributed to the shortage of slaughter ready sheep.
“There has however been a steady increase in the slaughtering capacity utilisation from January to May 2016 across all three abattoirs thus also causing an increase in the ratio of slaughtering compared to that of live export. However it is clear that abattoirs are still operating below the 80 percent capacity. Low production numbers of sheep as well as the uncompetitive pricing of the abattoirs can be one of the attributing factors to the low through-put at these abattoirs,” explained the Meat Board. However, in the pork sector, a total of 19 138 pigs (1 608 tons) have been slaughtered locally between the months January to May 2016. This indicates an increase of 3 470 of from 15 668 pigs (1 316 tons) slaughtered over the same reporting period in 2015. This gives an indication of an increase of 18.13 percent between the two years.
“The low production of pigs and therefore pork meat is much lower in Namibia compared to the volumes that are produced in South Africa. This therefore contributes towards the higher market share that the imported pork has compared to the local slaughter. The imports make up 51 percent of the total market share whilst the local pork makes up 49 percent of the market share. This difference is such as Namibian remains to be a net importer of pork and pork products from South Africa,” added the Meat Board.
Evidently, Namibia is currently experiencing a drought despite positive rain prospects in the first quarter of the year. The lack of rainfall will result in the even less availability of feed for cattle which will in turn shall result into cattle losses for some of the farmers. Farmers would then opt to move into weaner production in order to save on the available feed as well as associated costs. A decrease in the slaughtering at the abattoirs compared to the live exports could be anticipated as the year commenced.
The further impact on the marketing of cattle to South Africa as a result of the revised import conditions will be seen forthward.
“There is therefore a need to develop in-house capacity to retain weaners in the country. No market currently exists for the cattle producers in the NCA.
There has been a general decrease in the marketing of sheep during the reporting period compared to the same period last year. According to the rangeland status report, most areas in Namibia have received rainfall below average.
“This therefore means that farmers are faced with the challenge of a shortage in fodder for their animals resulting in low production figures and a reduction in the quality of slaughter animals. Emergency marketing will be witnessed as the months proceed. Abattoirs continue to face the challenge of the 60 percent levy on the export of raw skins which contributes to the low prices offered to producers when compared to that offered by the RSA abattoirs.
These factors could result in Namibia losing market share in RSA retail markets due to the in-consistency in delivery and lower quality products recommends the Meat Board.
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