By Hilary Mare
SINCE March 2018, the Meat Corporation of Namibia (Meatco) has managed to pay producers well above the South Africa parity price across all grades, excluding fat equalisation and weight premiums, Confidente has established.
This came at the backdrop of the financial difficulties experienced in the 2017/18 financial year, which hindered the corporation from paying producers above the SA parity price in line with the Meatco mandate of maximising best returns for producers.
“Meatco is aware that the ratio between slaughter and weaner prices is not favourable towards the slaughter of ox production system. Taking into account the current downward trend of weaner prices together with the improvement in Meatco’s slaughter prices, farmers should once again be motivated to move into slaughter cattle production,” Meatco said last week.
Despite the present strenuous environment where the Meatco factory is running at only 45 percent capacity, the corporation acknowledged that the 2017 prices that were below SA parity had adversely affected it.
“Cattle delivered to Meatco directly from the farmer remain the preferred supply channel. Meatco acknowledges that the 2017 slaughter prices paid below parity resulted, amongst others, in a record number of animals exported live to neighbouring SA. We, therefore, expect availability of slaughter cattle to be a challenge in the next coming years due to depleted stock,” Livestock Procurement Executive: Heiner Böhme said.
“In a bid to ensure maximum capacity utilisation through our factory whilst increasing efficiencies and maximising producer returns, Meatco will need to continue with the Backwards Integration Initiatives as well,” Böhme added.
Earlier this year, Confidente reported that Meatco had increased producer prices to a record high in a bid to cushion producers from the looming drought. Prices range from N$40.95 for C-grades to N$46.95 for A-grades for 260kg carcasses.
According to the Acting Chief Executive Officer, Jannie Breytenbach, Meatco understands the looming drought that producers are faced with and this is vital in keeping the industry vibrant.
“Meatco re-assures our valued producers that we are committed to keeping the livestock industry vibrant as an important segment to the Namibian economy,” said Breytenbach.
Previously, the corporation’s prices ranged from N$33.09 for C-grades to N$40.19 for A-grades for 260kg carcasses.
“Meatco’s aim is to stabilise local cattle prices as much as possible and soften the decline in prices as best we can. Despite all the challenges, Meatco strives to help Namibian producers get through these trying times, keeping in mind the future of the Namibian beef industry,” the company said.
B-grade prices now top N$42 from N$35.
Notably for the 2017/18 financial year, the corporation paid 53.2 per cent of its beef revenue to its producers despite suffering a 15.9 percent revenue decline, leading to an operating loss of N$20.1 million and a loss for the year of N$42.9 million.
“Regarding producer price, 2017/18 was particularly a good year for producers as the prices paid by Meatco have been substantially higher than ever before in the Corporation’s history. The average producer price of N$37.64/kg was 10.5 per cent higher than the previous reporting period (2016/17: N$34.06/kg) and 4.9 percent higher than the South African parity price. A total of N$749.617 million (2016/17: N$899.852 million), representing 53.21 per cent of Meatco’s revenue of N$1,409 million, was paid out to producers,” Meatco said in its annual report.
Confidente. Lifting the Lid. Copyright © 2015