Weaner production can ruin beef value chain
17 September 2021 | Agriculture
Although good prices are currently paid for weaners, should the trend continue, Namibian producers will eventually lose an important value chain where value-added beef can be sold in profitable niche export markets.
In a media statement released earlier this week, Beef Value Chain Forum (BVCF) chairman Mecki Schneider said this increases the risk of dependence on a one-way live export market to South African feedlots.
Namibian producers have, therefore, instructed the BVCF to establish a profitable and sustainable value chain for the country's beef - which includes the establishment of a new, modern export abattoir and processing plant.
Schneider said the move is important so that Namibia does not have to give up its niche export markets for beef in the end.
"It must be emphasised that the aim is to reduce the number of live weaner calves leaving the country by offering a competitive price in the slaughter industry and, on top of that, slaughtering 50 000 more cattle.
He said a reversal strategy will only succeed with the help of market forces, such as better slaughter prices.
According to Schneider, this will help ensure that our international high-quality beef market does not lose its market share - something that was clearly highlighted in a pre-feasibility study.
Profitable and sustainable
This after the forum held a meeting in Otjiwarongo last week so that the task team could give feedback to its members on, among other things, a feasibility study as well as a business plan.
"The focus was on a modern layout for an abattoir, while several places were visited and two sites were selected as possible locations to build an export abattoir and processing plant, he said.
He added that the business plan has also been endorsed and the committee has been instructed to establish a profitable and sustainable sector for the beef value chain.
According to him, livestock producers requested a feasibility study in 2017 to highlight the shortcomings and assess the profitability of beef exports in the country.
A pre-feasibility study on the Namibian beef value chain was then completed last March.
Schneider said the study clearly indicated that the beef slaughter industry and - in particular - beef exports are no longer competitive, meaning producers no longer receive a competitive price for their slaughter cattle.
It also indicated that there is a shift towards weaner production, for which good prices are currently being paid, he said.
Schneider stressed that Namibia's beef is known for its quality and wholesomeness due to its natural production methods and is highly sought-after in niche markets.
“Only through market forces, through better slaughter prices, is a turnaround strategy possible to ensure that our international market for high quality beef does not lose market share. This was clearly stated in the pre-feasibility study,” he said.
He said following the findings of the 2020 study, a group of concerned livestock producers met in November 2020 in Otjiwarongo to discuss the way forward. At the meeting, it was agreed that an alternative plan should be found for profitable and sustainable value addition in the cattle sector.
At that time, a task force with eight members was formed. The forum's members form the basis of that group, and the aim is to launch a producer-driven initiative to ensure a profitable beef export market.
"Numerous meetings have meanwhile been held all over the country to mobilise a strong producer base. In total, more than 250 members joined us and paid N$5 000 in membership fees.”
According to him, the original goal was to raise N$1 million to submit a feasibility study and business plan. In the end, more than N$1.9 million was raised through membership fees as well as additional funding,” Schneider said.
The task force was supplemented with six members for additional support and members had to perform various tasks, while consultants were appointed to complete the feasibility study and draw up the business plan.
Discussions were also held with government, financial institutions and various interest groups to support the initiative.