Drought empties farmers' pockets

The drought has increased costs for local farmers while prices have dwindled for their produce.

16 May 2019 | Disasters

While farmers are braced for yet another drought that has negatively affected livestock prices and fodder production, increasing on-farm expenses are also significantly impacting on producer profits.

According to the first-quarter review for 2019 by the Namibia Agricultural Union (NAU), livestock prices fell drastically, while the agricultural inflation rate increased.

The agricultural inflation rate increased by 4.4% year-on-year during the first quarter of 2019. This was mainly driven by an 8.6% year-on-year increase in feed costs, a 6.1% year-on-year increase in capital expenditure, and a 6.5% year-on-year increase in fuel prices.

Comparing the first-quarter prices of 2018 to those of 2019, cattle prices dropped by 10.3%, while agricultural production expenses increased.

A decrease in the total weighted cattle prices over the past 12 months was primarily due to a 22.6% drop in weaner prices, while slaughter prices increased by 14.7%.

The increase in slaughter prices resulted from Meatco keeping their prices stable for the past months despite a drop in other livestock prices.

Meanwhile, sheep prices increased slightly by about 1.4% year-on-year.

“Evidently, producers continue to pay more for a basket of inputs used than what they receive for their output. Over 13 years of monitoring, the price-cost squeeze of cattle is estimated at 4% per annum, and for sheep at 0.7% annum. Besides recurring droughts, on-farm expenses continue to have a significant impact on producer profits.”

According to the union livestock mortality rates are increasing and the current grazing conditions are threatening the livestock industry.

“To reduce pressure on the limited grazing and to prevent financial losses, farmers are destocking.”

In the first quarter of this year 63 067 live cattle were exported to South Africa, 219 were exported to Angola and 131 to other countries. Export abattoirs slaughtered about 21 494 head of cattle.

Sheep export abattoirs received a throughput of about 53 851 sheep and 104 196 live sheep were exported.

Of the total live sheep exported, 40.3% were slaughter sheep, 11.4% were fat-tailed sheep, and a remarkable 48.3% were too lean or too small sheep because of insufficient pasture and drought conditions.

A total of 79 334 cattle were marketed at auctions, and of that number about 21.4% were cows.

Comparing the first quarter of 2018 to that of 2019, the marketing of cows at auctions increased by about 56.4%.

Farmers auctioned 10 862 cows in 2018 and 16 989 cows in 2019.

“A lack of grazing and fodder in some areas led to an increased marketing of lean cows. Hence, farmers auctioned 3 538 lean cows in 2018 and 7 941 lean cows in 2019, which means that the marketing of lean cows grew by 124.4%. An increase in cow marketing reduces the future reproductive capacity of the cattle industry.”

“Variable rainfall and other factors have placed a lot of stress on the Namibian rangeland, leading to fragile and poor vegetation cover, and hence a low carrying capacity on agricultural land.

“The available vegetation cover cannot support a large number of livestock on farms with the current drought conditions,” said the NAU.

The vegetative condition of 92% of all hectares of land in Namibia is below normal, while a staggering 64% of all land has a condition less than 20% of the norm.

In order to ease pressure on the available vegetation, farmers are urged to urgently destock to prevent financial losses.

With regard to the agronomy industry, the white maize sector anticipates a harvest of about 35 530 tonnes of white maize, which will be 37% less than the 2018/2019 harvest.

“The decrease in production is attributable to crop failure and lack of planting due to poor rains,” the union says.

It is anticipated that there will be a shortage of white maize in the local market throughout 2019/2020 season, given that the monthly production tonnage is below the average monthly domestic demand by millers of at least 14 500 tonnes.

During the 2018/2019 season farmers marketed 7 626 tonnes of wheat from October 2018 to February 2019. More than half (4 369 tonnes) of the total marketed wheat came from areas in the South, whereas 2 359 tonnes (30.9%) came from Kavango, and 898 tonnes (11.8%) came from the Maize Triangle.

In the 2018 season, 56 421 tonnes of white maize was marketed from May 2018 to December 2018. Of the total white maize marketed during the 2018/2019 period, 32 598 tonnes (57.8%) was from irrigated areas, and 23 823 tonnes (42.2%) was from rain-fed areas.





ELLANIE SMIT

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