Probing the beef value chain

There are challenges to various sectors of local beef production and an investigation in underway to optimise it.

28 February 2018 | Agriculture

Namibian producers earned an amount of N$3.4 billion from the sale of cattle during 2017, which is 45% of the total agricultural income for the year.

This figure demonstrates a drastic increase from the N$2 billion made in 2016.

This is according to the latest research by the Namibia Agricultural Union (NAU).

The union says that it is critical for the Namibian economy that the industry is healthy and sustainable.

The vision of the Livestock Producers' Organisation (LPO) is that all three markets which are currently served, namely the EU export market, the local market for beef, as well as the export market of live cattle mainly to South Africa, are of vital importance to ensure a fair price for producers.

The LPO management recently visited the South African meat industry in order to get a better picture of the value chain, to which Namibian weaners are delivered.

According to the NAU, the South African beef industry annually slaughters about three million cattle, of which 87% are A-grade.

The cattle are mainly from feedlots which are vertically integrated in the total value chain and deliver a final product to the retailers.

Exports of beef from South Africa in the previous year during the drought came to approximately 50 000 tons.

“Due to the stabilisation of the South African rand, international exports are not competitive anymore and it is expected that exports will decrease in 2018 and that this export meat will have to be absorbed in the South African market.”

The union said due to the relative low maize price, meat which is produced under intensive circumstances is in the market available at a very competitive price.

“The ailing economic conditions force consumers to rather buy cheaper chicken and pork to replace beef.

Weaners, however, are still in high demand due to the reduction of South African cattle herds and it is expected that the weaner prices will stay competitive for the next two years,” said the union.

According to the union, an oversupply on the local Namibian market due to emergency sales may force prices downwards on the short term.

Furthermore the LPO expressed concern about the sustainability of the export market of beef from Namibia and said it is currently trying to make other plans.

The LPO management decided to investigate how an optimal processing- and marketing organisation should be, one which is sustainable on the long-term and in which producers are directly involved.

The plans are already in progress, but a proper sustainability study must still be done.



STAFF REPORTER

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