Windhoek-Compared to 2016, the total number of cattle marketed between January and May this year have decreased by 0.9%, reducing from 145,900 to 144,620. But Namibian weaner producers have been laughing all the way to the bank since the beginning of the year.
Due to high weaner prices as a consequence of the low cost of grain (maize) prices in South Africa, notable live exports increased with 12.4% year-on-year compared to the corresponding time last year.
After the previous drought, producers in SA are rebuilding their herds and slaughter-ready cattle are becoming limited. This artificially increases the demand for slaughter cattle and the extension of feed lots and subsequently explains the increased demand for Namibian weaners. According to the latest figures from the Meat Board, Namibian weaner prices followed an upward trend between January and May 2017, moving on average from 16.96/kg in January to 21.07/kg in May after peaking at N$$24.05 in April. The high prices for weaners serve as an incentive to increase supply. Year-on-year slaughtering decreased with 28.85% at the export abattoirs. The drought had a negative bearing on the slaughter number for that year. Of the total cattle marketed, 74% were live exports, 20% export abattoirs, whilst the B& C class abattoir accounted for 6%.
Out of the 36,768 of cattle slaughtered during the reporting months, 170 were slaughtered at the Meatco mobile abattoirs in the Northern Communal Areas (NCAs). It is clear that the inability of the NCAs market to take up these products remains a challenge going forward.
Total production increased by 4.63% from 336,187 in 2016 to 352,490 in 2017. This increase was mainly driven by the live exports of sheep, which, compared year-on-year, increased by 20% from January to May 2016 and 2017. Increased live exports can be attributed to the increase in Northern Cape sheep prices, as well as the utilisation of the accumulated sheep quota.
Producer prices are expected to remain sideways for the second quarter of 2017.
The slaughter industry will however be under pressure as result of herd rebuilding after the herd liquidation during the 2014/2015 and 2015/2016 drought years. Weaner prices are expected to increase steadily in the short term, but are expected to stabilise during the last quarter of the year. This situation might push the export figures to a disadvantage for the slaughter industry.
The bumper harvest in SA resulted in low maize prices in that country and this has placed the feedlots in a favourable position in relation to feeding costs. The latter has created an increased demand for weaners from both South Africa and Namibia and is the result of the skyrocketing prices currently experienced.