Red flag shoots up for weaner industry
By Deon Schlechter
HEJA LODGE – “You do not compete in the Olympics bare feet.”
With this reminder, one of South Africa’s leading agricultural economists, Professor Johan Willemse, last week warned the Namibian beef sector to farm in a much more scientific and innovative way in order to survive in the ever-changing world meat market.
Prof Willemse of the Department of Agriculture of the University of the Free State, painted a bleak picture of the weaner production industry for Namibian cattle producers over the next decade, saying the lucrative industry could be phased out within ten years. Speaking at the opening of the Namibian Stock Breeders Association’s second Meat Production School at Heja Lodge last week, he urged Namibian cattle producers to find the “competitive sweet spot” with regards to productivity, innovation and profit. “Cattle farming is a business, and as any other business is a continuous process of re-positioning. The trick is to get maximum return on investment on a sustainable basis, sell the right product at the right price in a changing market environment and to be competitive,” he stressed.
Prof Willemse warned that a country like Brazil – which possesses 853 million hectares of land and 45 million cattle – will within the next decade serve more than 40% of the world beef markets. “India is the other big emerging meat producer that will become a massive exporter of water buffalo meat within the next decade. South Africa, Brazil and India are partners in Brics, and the possibility is there that the three countries will operate as free trade block in the future.”
He is also concerned about the affordability of meat as a source of protein measured against the availability and costs of chicken. Namibia’s weaner export industry is totally dependent on feedlots in South Africa, and the neighbouring country’s feedlots are already struggling to survive in light of the ever-increasing prices of maize as fodder for the animals.
To make things worse, South Africa is negotiating a free trade agreement with Brazil, which would result in the South American country landing Brazilian beef at low prices of between N$16 and N$17 p/kg in South Africa.
Prof Willemse said feeding lots in South Africa will only survive if maize can be produced at half the price it is done currently, otherwise no weaner market would exist within the next ten years. He pointed out that maize prices have increased by five times in the past decade while the prices of weaners have only increased by 1.5 times. The price of Grade A beef increased by 1.9 times in the past ten years. Maize prices shot up by 12 pr cent in the past three years.
He stressed that Namibian cattle producers will have to accept that the future of farming lies in mega-units. “It is a world-wide trend to buy out small-scale farming land, consolidate farms and create bigger production units. The best example is China with its 1.5 billion people who realised they cannot feed the population in a country with small-scale farmers who are just able to produce enough to survive themselves. China, therefore is taking people off the land to create bigger and more profitable farming units,” he noted.
Willemse also pointed out that this trend results in farming land getting more expensive. He reminded Namibian producers that markets and droughts are cyclic, and that farmers must take this into account when they plan for the future.“The focus must be on investing in new technology, on innovation and on the unique attributes of your red meat if Namibia wants to be a role player in the ever-changing international markets. Otherwise, you will be competing in the Olympics barefeet,” he concluded.