Increased primary production or bust for SA beef

Estimated reading time: 4 minutes

While South Africa’s beef is currently the cheapest red meat in the world, the country’s beef livers are the most expensive on the planet. This came to light during the Red Meat Producer’s Organisation’s (RPO) annual congress held in Pretoria recently.

Louw van Reenen, CEO of Beefmaster Group, said that primary producers needed to increase production and work together with other role-players in the value chain to create a sustainable market supply. This would help meat marketers to secure a greater market share and boost farmgate prices. “South Africa’s average farmgate price for weaners has been 50% below the global average for the past decade and now we have the cheapest product in the world. This needs to change and the only way to change it is through increased primary production.”

Van Reenen said that South Africa’s economic growth was too slow to grow businesses and that it was crucial to find alternative export markets and maintain a constant supply to those markets. He also said that there was a huge growth opportunity locally within the lower LSM markets (below LSM 4).

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“We learned this especially during the Covid-19 lockdown when hawkers could not sell their produce. During that period, we had an oversupply of between 20 000 and 30 0000 animal heads. That had a massive impact on the price of the rest of the carcass.”

Willie Clack, first vice chairperson of the RPO, said that Van Reenen’s point about market opportunities was highlighted by the fact that South Africa imported lower-value meat cuts because demand exceeded supply. “We need to understand our local market better, especially the lower income groups.”

More carcasses needed

David Osborne, founder of Number Two Piggeries (N2P) agreed with Van Reenen. Over 2,6 million head of cattle and over 4,9 million sheep were slaughtered between November 2018 and October 2019 (Table 1). This number dropped to just over 2,5 million head of cattle and just over 4,2 million sheep slaughtered between November 2021 and October 2021 (Table 2).

Eastern Cape218 796436 34210194 156
Free State508 781827 691223 287
Gauteng457 335595 96161 311 373
KwaZulu-Natal239 056121 620456 861
Limpopo152 90420 42417961 953
Mpumalanga541 95388 17786156 151
Northern Cape182 0151 721 50270112 397
North West257 92140 72614386 776
Western Cape120 4141 125 329113646 182
Total2 679 1754 977 7726073 249 136
Table 1: Total slaughters Nov ‘18 to Oct ‘19 (Source: Number Two Piggeries)

Eastern Cape204 434310 8694278 501
Free State448 625701 281401 247
Gauteng419 867567 10081 584 832
KwaZulu-Natal245 32095 1971505 700
Limpopo136 79423 610171117 684
Mpumalanga555 19181 220890 117
Northern Cape173 8461 223 868158119 167
North West255 35935 59112471 293
Western Cape125 2591 221 567474701 323
Total2 564 6954 260 3039483 869 864
Table 2: Total slaughters Nov ‘21 to Oct ‘22 (Source: Number Two Piggeries)

“Slaughtering numbers of cattle and sheep have dropped significantly from pre-Covid times, to post-Covid times. Whose fault is that? It is the primary producers’ fault. You need to increase your output if you want financial success.”

In contrast to these figures, pig slaughtering increased from over 3,2 million pigs to 3,8 million pigs. Pork producers were also able to increase carcass weight during this time.

Osborne said the pork industry was only able to grow due to primary pork producers’ decision to grow the industry. “The pork industry has been through a devastating period. A 5% oversupply of meat will lead to a 15% drop in prices. That’s why it will be devastating if a primary producer simply expands, without consulting the rest of the chain. Markets need to be created. We need to expand the demand (through exports) while we are expanding primary production.”

Unity is the only way forward

Clack said that the red meat value chain’s different segments needed to work on their distrust of each other. “In no other industry is there as little trust as we find in the red meat industry. We are constantly blaming other segments of the industry for problems,” Clack said. “We are a chain and thus we need to be as intertwined as fingers.”

Clack said there was also no place for keyboard warriors in the industry. “There are people that will break down the industry within seconds, while they won’t lift a finger to improve anything. This is cowardice.”

“The only way to stop this online agricultural mafia is to stand as a united front. We need to see each other as brothers,” Clack added.Susan Marais, Plaas Media

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