Windhoek — Drought fears of have sent auction prices for livestock through the roof, as desperate farmers scramble to sell valuable assets in anticipation of a long and tough winter period ahead.
Now is a good time to sell livestock while auction prices are exceptionally high with the Agra auction fetching the highest price of N$41.86 per kg for castrated calves in January.
Titus Koen, Agra's general manager: Auctions, says future trends in auction prices are difficult to predict.
"Livestock producers, who have cattle that are ready to market, should preferably sell them as soon as possible to make use of the good prices. We have no certainty as to how long the prices will remain this strong," he advises.
Despite high prices for weaners for almost a year, what can happen in the near future in the market cannot be forecast.
"Agra often tries to speculate what could happen in the coming year, just to realise that it is virtually impossible to predict price trends on auctions," says Koen.
He adds that the main reasons why weaner prices have risen sharply are due to a shortage of cattle in South Africa due to recent droughts, as well as the lower maize price, which holds a significant cost benefit for feedlots.
"The other reason is that South Africa, previously a net importer of meat, has now become a net exporter of meat after the country successfully marketed its meat overseas. The largest part of Namibian weaners are currently being exported to South African feedlots," says Koen.
Maize, or feed, is the main expenditure of a feedlot. The maize price dropped below N$2,000 a tonne after South Africa produced a record maize yield last year. The local price for weaners is strongly linked to the South-African maize price. If it remains stable, chances are that the weaning calf price will remain stable. However, if it fluctuates or becomes more expensive, the weaning price will definitely decrease.
Koen says a significant rise in weaner prices in the industry was predicted, but this sharp rise during the previous year was definitely higher than
"Following discussions between Agra and South African feedlots middle last year, a consensus was reached that the high auction prices would not stay at these levels for a long time. However, the contrary was the case when prices increased even more. So far, these high prices have been maintained," says Koen.
According to statistics of auction prices kept by Agra, the average price paid for tollies in June 2016 stood at a low of N$15.70 per kg. By this January, it had increased to N$36.94 per kg, which means more than double the price of June 2016 is currently being paid. Koen says prices for tollies reached a maximum of N$40.27 per kg at Agra auctions last year.
Accordingly, data maintained by the Livestock Auctioneers, Brokers and Traders Association (LABTA) shows that national average auction prices of all Namibian cattle agencies have risen sharply since June 2017.
National figures indicate, with the exception of August 2017, that the average price per kg has not fallen below N$31,23 since September last year.