… As meat industry remains subdued
By Hilary Mare
OUT of the total of 36 768 of cattle slaughtered during the reporting months of January to May, only 170 of those cattle were slaughtered at the Meatco mobile abattoirs in the Northern Communal Areas (NCAs), a report released by the Meat Board of Namibia has revealed.
Compared to the year 2016, the report further reveals, the total of cattle marketed between January and May 2017 has decreased by 0.9 percent, reduced from 145 900 to 144 620, with year-on-year slaughtering decreasing by 28.85 percent at the export abattoirs in the second quarter.
Of the total cattle marketed, 74 percent were live exports, 20 percent were from export abattoirs, while the B & C class abattoir accounted for 6 percent of the total.
“It is clear that the inability of the NCAs market to take up these products remains a challenge, henceforth,” the report affirmed.
Meatco ceased operations at Oshakati and Katima Mulilo last year, because of losses of close to N$43 million during the 2014/15 financial year.
Recently, Agriculture, Water and Forestry Minister, John Mutorwa, admitted that the NCAs had been excluded from the market, when he announced the two operators that will be taking over the government-owned abattoirs in the NCAs, to address the situation.
“There is no formal market. It is a big problem. Therefore, it is very important for these operators to open these abattoirs, so that once operational, there is some market outlet for these farmers,” Mutorwa said.
From an industry perspective, the Meat Board noted that producer prices are expected to remain “sideways” or stagnant for the second quarter of 2017.
“The slaughter industry will, however, be under pressure, as a result of herd rebuilding, after the herd liquidation during the 2014/15 drought years. Weaner prices are expected to increase steadily in the short-term, but are expected to stabilise during the last quarter of the year.
“This situation might push the export figures to a disadvantage for the slaughter industry. A bumper harvest in South Africa resulted in low maize prices in and this has placed their feedlots at a favourable position, in relation to feeding costs. The latter has created an artificial demand for weaners, from both South Africa and Namibia, and is the result of the skyrocketing prices that we are currently experiencing,” the Meat Board said.
Compared to 2016, which was declared a drought year, Namibia received better rains, on average, so far this year.
Unfortunately, the southern parts of the country were not as fortunate, and subsequently producers do not have sufficient feed available for their livestock. The strenuous grazing conditions, coupled with severe penalties on fat grade, weight (below 16kg) and conformation ranging between N$7-10/kg, will cause mutton markets to retain the current momentum.
“Due to high weaner prices, as a consequence of the low cost of grain (maize) prices in South Africa, notable live exports increased with 12.4 percent year-on-year. After the previous drought, producers in South Africa are rebuilding their herds, and slaughter-ready cattle are becoming limited. This artificially increases the demand for slaughter cattle and the extension of feedlotting, and subsequently explains the increased demand for Namibian weaners.
“In order to address this problem amicably, the standing drought arrangement of ‘too lean and too small’ still stands, and therefore producers that are affected are encouraged to export under this arrangement, as per the standard operating procedures.”
It is expected that that lamb prices will remain sideways, due to seasonal demands and limited supply in the South African markets.
The A2 and C2 sheep price differences between Namibia and the Northern Cape increased from N$5/ kg to N$10/kg.
Under normal circumstances, the difference in prices would have increased for the live export of sheep to South Africa.
However, due to the 1:1 sheep export condition, producers are still compelled to slaughter at local export abattoirs, to create fairness in the market.
The Namibian regulator further stated that continuous efforts are made to address the duration of VAT claim payments with the Receiver of Revenue, with the aim of improving the cash flow of abattoirs, and simultaneously addressing the issue of delayed payments to producers.
Confidente. Lifting the Lid. Copyright © 2015