Small-stock sector must reinvent itself
Small-stock sector must reinvent itself

Small-stock sector must reinvent itself

The local sheep-farming industry has shrunk drastically and the Meat Board is deeply concerned about the sustainability of the sector.
Ellanie Smit
Small-stock farmers have been urged to make use of opportunities to improve small-stock marketing.

Market analyst Daniel Motinga said this at a Business7 event at the Windhoek showgrounds yesterday.

He said farmers should move from a 1 000-head herd to a 20 000-head herd and cooperate across farmers' unions and tenure structures to improve production and reproduction.

Together, farmers can invest in genetics, infrastructure, implements and logistics as well as predator control.

“No single farmer can win alone,” Motinga said.

Referring to a recent annual report from the Meat Board of Namibia, Motinga said the common denominator was that local sheep slaughter was no longer financially viable for either the producer or the abattoirs.

Therefore, the 60% levy on sheepskin exports should be abolished to help the sheep industry to recover and put other restrictions on the export of sheep and sheep products.

The Meat Board is deeply concerned about the sustainability of the sheep sector in Namibia, said Motinga.

The local sheep industry has shrunk drastically and sheep farmers have incurred severe financial losses following the government's introduction of legislation in 2004 stipulating that for every sheep exported live, six sheep must be slaughtered locally.

However, Motinga said policy works and even wrong policies incentives could work quite well.

He added that farmers must lobby for the right mix of policy and build a business case. “Emotion will not help.”

He said farmers must also understand the pricing environment and respond to variability.

According to him, regulations are not the cause of the problems in the small-stock industry. “External factors are,” he said.

Key challenges the industry is faced with include policy risks and therefore more emphasis needs to be placed on local value addition.

Another challenge is production risk and this includes low and variable rainfall, expensive input cost, variable grazing, owner-manager production environments, vulnerable infrastructure, predator control and lack of corporatisation and scale economies.

Motinga said during the drought spell there was a 40% variation during the first quarter alone due to distress marketing and condition issues.

“Using data from 2014, it was found that winter carcasses are slightly heavier, but do not necessarily earn more income.”

He explained that heavier carcasses do not necessarily mean more income as prices seem to reset lower in June, but there is limited discrimination in prices among grades A1 to A4.

“In December prices typically peak when farmers go to Henties,” said Motinga.

He further said farmers should be aware that the pricing environment is not controllable and price discovery is not always smooth.

Auctions seemingly do not discriminate drastically against too much conditioning compared to slaughtering at abattoirs.

However for sheep, auctions use abattoir prices as reference and therefore if abattoir prices are weak, farmers should not expect strong prices at live auctions, said Motinga.

“For auctions you never know the price until you have sold off so it is difficult to budget.”

An investigation requested by the Meat Board and conducted by PriceWaterhouseCoopers in 2007 indicated that the Namibian Small Stock Marketing Scheme “did not have the desired effects and results originally intended.” Since the introduction of the scheme in mid-2004, and through its various stages, the export of live sheep declined dramatically. For example, the decline from July 2004 to May 2008 was a disappointing 84%.

ELLANIE SMIT

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Namibian Sun 2024-03-29

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Katima Mulilo: 19° | 36° Rundu: 19° | 29° Eenhana: 19° | 29° Oshakati: 21° | 30° Ruacana: 20° | 33° Tsumeb: 19° | 29° Otjiwarongo: 16° | 29° Omaruru: 19° | 32° Windhoek: 17° | 29° Gobabis: 17° | 30° Henties Bay: 16° | 20° Wind speed: 22km/h, Wind direction: S, Low tide: 11:22, High tide: 05:24, Low Tide: 23:26, High tide: 17:46 Swakopmund: 16° | 17° Wind speed: 24km/h, Wind direction: SW, Low tide: 11:20, High tide: 05:22, Low Tide: 23:24, High tide: 17:44 Walvis Bay: 16° | 22° Wind speed: 27km/h, Wind direction: SW, Low tide: 11:20, High tide: 05:21, Low Tide: 23:24, High tide: 17:43 Rehoboth: 19° | 30° Mariental: 23° | 34° Keetmanshoop: 24° | 35° Aranos: 22° | 33° Lüderitz: 15° | 28° Ariamsvlei: 24° | 35° Oranjemund: 14° | 25° Luanda: 27° | 28° Gaborone: 20° | 32° Lubumbashi: 17° | 26° Mbabane: 16° | 21° Maseru: 11° | 29° Antananarivo: 16° | 27° Lilongwe: 17° | 27° Maputo: 20° | 28° Windhoek: 17° | 29° Cape Town: 17° | 28° Durban: 20° | 24° Johannesburg: 16° | 24° Dar es Salaam: 26° | 32° Lusaka: 20° | 30° Harare: 16° | 29° Currency: GBP to NAD 23.77 | EUR to NAD 20.36 | CNY to NAD 2.61 | USD to NAD 18.89 | DZD to NAD 0.14 | AOA to NAD 0.02 | BWP to NAD 1.33 | EGP to NAD 0.39 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.74 | ZWL to NAD 0.04 | BRL to NAD 3.77 | RUB to NAD 0.2 | INR to NAD 0.23 | USD to DZD 134.14 | USD to AOA 832.63 | USD to BWP 13.71 | USD to EGP 47.35 | USD to KES 130.98 | USD to NGN 1415.13 | USD to ZAR 18.89 | USD to ZMW 25.01 | USD to ZWL 321 | Stock Exchange: JSE All Share Index 74536 Up +0.85% | Namibian Stock Exchange (NSX) Overall Index 1528.69 Up +0.84% | Casablanca Stock Exchange (CSE) MASI 12986.94 Up +0.04% | Egyptian Exchange (EGX) 30 Index 27559.35 Down -2.36% | Botswana Stock Exchange (BSE) DCI Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - 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Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 233.12/OZ UP +1.93% | Copper US$ 3.99/lb UP +0.12% | Zinc US$ 2 455.50/T UP 0% | Brent Crude Oil US$ 87.65/BBP UP +1.46% | Platinum US$ 908.62/OZ UP +1.53%