Despite severe drought conditions, cattle exports declined considerably by 26.49 percent in the first quarter of the year due to weak demand for weaners by South African feedlots who were adversely affected by Foot-and-Mouth Disease-related trade restrictions. Since weaner exports are a leading contributor to the sector's performance, their decline greatly influenced an overall weak performance.
Releasing the statistics of the livestock sector for the first quarter of 2019, the Meat Board announced that export abattoirs improved performance with a 22.01 percent growth rate on account of drought-induced marketing in this period. Butchers on the other hand experienced a decline of 21.20 percent, losing market share to export abattoirs whose producer prices remained competitive during the first quarter.
There was an overall decrease in the total production of cattle between January and March 2019.
Although weighted average capacity utilisation of export abattoirs for the first quarter stood at 70.30 percent, it is worth noting that Meatco registered a 107.86 percent monthly capacity utilisation in March alone, indicating over-capacity utilisation which is still continuing in May.
Year on year, an 18.55 percent decrease was witnessed in the total production of cattle from January to March compared to the same period of 2018. Production decreased from 115,257 in quarter 1 of 2018 to 93,873 in quarter 1 of 2019.
From total cattle marketed, 68 percent were live exports, 23 percent were taken up by export abattoirs while B&C class abattoirs only enjoyed nine percent of the market share.
A total of 8,962 cattle were declared to the Meat Board by the registered B&C class abattoirs in the first quarter of 2019. This compares adversely by 21.20 percent to 11,373 observed during a similar period in 2018.
The long term sheep marketing trend continues to depict a gradual reduction. The sheep sector performed well with both live exports and slaughtering by export abattoirs driving the momentum. Due to the drought situation, producers have been forced to manage their livestock levels to prevent further deterioration of rangelands and avoid losses from livestock mortalities.
A total of 177,180 cattle were marketed through various formal channels in the first quarter of 2019, translating to a 17.37 percent increase in comparison to the same period in 2018 when 150,961 cattle were marketed.
During the first quarter, a total of 104,196 heads of sheep were exported live, accounting for 59 percent of the market share. The sheep slaughtered at the export abattoirs accounted for 30 percent at 53,851 heads whilst those that were slaughtered at the B&C class abattoirs accounted for 11 percent with 19,133 sheep.
Namibian sheep prices dropped by 9.45 percent from N$64.52 in the first quarter of 2018 to N$58.42/ kg in quarter 1 of 2019. Likewise, Northern Cape prices also dropped by 9.90 percent during the same period.
The price difference of the Namibian A2 sheep prices compared to the Northern Cape prices generally declined by 17.07 percent from -N$4.16/kg in quarter 1 of 2018 to -N$3.45/kg observed in the first quarter of 2019.
- The Meat Board of Namibia continues to monitor the price gaps.
- Namibian C2 prices on average declined during the first quarter compared to the same period last year. The quarter 1 average C2 price stood at N$45.18/kg in 2019 compared to
N$48.07/kg. This represents a 6.01 percent drop which is to the detriment of producers, especially under existing drought conditions.
The Pork Market Share Promotion Scheme is in place to protect the Namibian producers from the surge of cheap imports. There is currently only one big pork producer in the country. The capital intensive nature of this production system, acts as a barrier to entry.
The first quarter Namibian pork ceiling price stood at N$ 34.05 / Kg, down by 8.62 percent from N$37.26 observed during the same period in 2018.
During the period under review, a total of 1,729 tonnes of pork were consumed by the Namibian market of which 1,003 tons were sourced locally as compared to the 726 tons imported from other countries.
This represents a 58 percent market share for local pork products as compared to the 42 percent imported.
Beef export abattoirs performed very well reaching unusual levels of capacity utilisation. Despite increased supply, abattoir prices remained at competitive levels. The ongoing drought has resulted in increased sheep marketing mainly live exports under the existing drought-marketing arrangements, namely too lean too small sheep whereas export abattoir activity has also increased.
Due to the small stock marketing scheme export restrictions, farmers are supplying sheep to abattoirs on below optimum prices as a matter of preventing a total loss of livestock. The Meat Board of Namibia is contemplating an interventionist strategy to encourage abattoirs to pay competitive prices while producers are also encouraged to support value addition ideals by slaughtering locally.
Read the original article on New Era.
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