Funds needed to finalise viable beef production system
About N$1 million needs to be raised to finalise all outstanding issues to build a viable beef production system for Namibia.
A beef value chain forum, with eight steering committee members, was established at Otjiwarongo on 17 November 2020 to assess these outstanding issues.
This will lead to a full feasibility study and a bankable business plan to ensure profitable and sustainable value addition in the beef sector, the forum said in a statement in December.
This follows the completion of the pre-feasibility study on the Namibian beef value chain last year by the Livestock Producer Organisation (LPO) and Namib Mills, with Windhoek Consulting Engineers heading the research.
The study showed that it is important that the livestock and beef export markets are in balance to ensure a sustainable fair price for producers.
The beef export market can pay a premium price to producers in an unregulated competitive market and thus automatically attract more beef for slaughter purposes to this value chain, it found.
It sought answers on what the selling price of Namibian beef in international markets is, what the operating costs of a beef export abattoir should be and whether a Namibian beef export abattoir can be operated competitively in an unregulated environment.
Namibia benefits from the best-paid beef markets in the world, but the weaner calf export value chain attracts more competitive prices and, therefore, results in attracting more beef.
Livestock sector essential
The LPO previously said it supports agriculture minister Calle Schlettwein's vision that agriculture offers the best opportunities to recover the Namibian economy and create employment to ensure food security.
“However, to reach this, the livestock sector is essential and certain critical factors are needed to bring about this growth.”
According to the beef value chain forum, a group of concerned livestock producers met on 17 November 2020 at Otjiwarongo to consider the options and any further involvement of the LPO in light of the report.
“Producers are concerned that the profitability of value addition of the beef sector is eroding and that producers who deliver slaughter cattle no longer receive a competitive price. The shift is to weaner production, which presently receives good prices, but as all cycles, this will be of a short-term nature.”
The forum said should this trend continue, Namibian producers will eventually lose the very important beef value chain with value-added products destined to lucrative niche export markets. “This will increase the risk of dependence on a one-channel export market to South African feedlots. It is through only market forces, through better slaughter prices, that a turn-around strategy is possible to ensure that our international value-added beef market is not losing market share.”
The way forward
Furthermore, the forum said the business structure, project financing, co-operation with all stakeholders and financial feasibility need to be addressed before final presentation to interested producers and possible investors to decide on the way forward in the coming months.
To drive the process, funds are required to attract the best expertise to support this endeavour and to ensure success.
“Hence, we call on all interested parties - producers and agribusinesses - to financially support this project with N$5 000 or more, with the initial aim of raising about N$1 million.”
This will give the team an indication of the support base and resources to finalise all outstanding issues, the forum said.