… 1 800 more cattle to be slaughtered using Fixed Price Slaughter Contract
By Hilary Mare
MEATCO has provisioned an additional slaughter quota of 1 800 cattle, using its Fixed Price Slaughter Contract (FPSC).
“The quota of 1 800 will be evenly allocated over a six-week period. The additional FPSC quota stems from a need by producers who did not manage to apply while the initial quotas were available,” the company said.
The corporation further stated that signed FPSCs must be sent to fixedcontract@meatco. com.na.
“This email address is solely used for the trading of these contracts. If a producer does not have access to email, he/she is welcome to visit their nearest Meatco office to sign and send the email from there.”
A futures contract is a legal agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity at a predetermined price, at a specific time in the future. In this instance, the commodity is the slaughter cattle from producers. The producer signs a legally binding contract to offer a certain amount of slaughter animals to Meatco, at a fixed price, at a set point in time.
Certain terms and conditions are then also attached to the contract that is unique to Meatco.
According to Meatco’s Livestock Procurement Manager, Abrie van Wyk, Meatco agrees to provide the benefit of a slaughter allocation to the producer, according to the first signature of the available contract.
“Similar to our usual standard, producers should fully comply with FANMEAT regulations, upon entering the contract, and cattle must also be compliant to be exported to the European Union and be fit for human consumption, as per the regulations of Directorate for Veterinary Services (DVS),” says Van Wyk.
Meatco and the producer enter into the FPSC with different roles.
The company undertakes to procure the cattle from the producer, while the producer makes sure the cattle is delivered at an agreed upon date, as stipulated and bound in the contract.
In order to qualify for the price, as per Schedule A, Meatco will verify that a minimum of 90 percent of the cattle, of the quantity stated in Schedule A, has been fulfilled by the producer.
Failure to deliver at least 90 percent of the agreed amount of animals, as per the contract, within the delivery period, will result in a penalty of N$2 000 per head of animal not delivered. Similarly, Meatco will also be penalised, should it fail for any reason to accommodate the animals, due to fault on its side.
Animals delivered above 100 percent of the contract will be priced at the normal weekly Meatco Producer Price. The first animals to pass over the carcass scale will be taken to be the signed quantity of animals under the FPSC.
For any unforeseen reasons, should Meatco not be able to purchase the animals within 14 days, after the agreed delivery, Meatco will pay a penalty of N$2 000 per animal on 90 percent of the agreed amount of cattle. Excluded are Acts of God, which result in a long-term closure of the abattoir, where Meatco at its sole discretion, will be able to cancel the contract.
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